Prime Highlights
- Sustainable bond issuance in the Middle East is expected to reach $20–25 billion in 2026, showing strong regional demand despite a global slowdown.
- Saudi Arabia and the UAE led regional growth in 2025, offsetting declines in other countries and driving a 3 percent rise in issuance.
Key Facts
- Sustainable sukuk hit a record $11.4 billion in 2025, accounting for over 45 percent of the region’s sustainable bond market.
- New Saudi guidelines aim to improve transparency for green and sustainability-linked debt, attracting global investors and supporting market growth.
Background
Sustainable bond issuance in the Middle East is expected to reach between $20 billion and $25 billion in 2026, according to a new report by S&P Global, highlighting strong regional demand despite a global slowdown.
The region recorded a 3 percent rise in sustainable bond issuance in 2025, even as global volumes fell by 21 percent. Growth was largely driven by Gulf Cooperation Council countries, particularly Saudi Arabia and the UAE, which offset a sharp decline in Turkiye.
Green projects lead the regional bond market, with funds going to renewable energy, real estate, and climate-resilient infrastructure. Analysts expect banks, governments, and large state-linked companies to continue playing a major role in sustainable financing.
S&P said the market shows a clear divide between bonds and loans. Sustainable loans are mainly issued by corporates and are concentrated in Turkiye, while bonds are led by Saudi Arabia and the UAE, which together accounted for about 80 percent of regional issuance in 2025.
Sustainable sukuk has emerged as a major growth segment. Issuance reached a record $11.4 billion last year, up from $7.9 billion in 2024, accounting for more than 45 percent of the region’s sustainable bond value. The report expects sukuk activity to expand further as regulations improve and investor demand increases.
Saudi Arabia introduced new guidelines for green and sustainability-linked debt to increase transparency and attract global investors. The region is also showing more interest in transition finance and climate adaptation projects.
Experts say that because the Middle East faces high climate risks and has made net-zero commitments, it will keep driving sustainable financing. Lower interest rates, oil market changes, and more diverse funding sources will also help increase issuance.
With strong policy backing and active participation from public and private sectors, the Middle East is positioning itself as a key hub for sustainable debt markets in the coming years.
