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Digital generated image of sustainable city in shape of dollar sign surrounded by trees. Getty Images Image used for illustrative purpose.
Green bond issuances in the Middle East and North Africa (MENA) more than doubled to $15.5 billion in 2023, driven primarily by the United Arab Emirates (UAE) and Saudi Arabia, according to a new report.
MENA was the second biggest source of primary emerging market green bond issuance outside China last year, the International Finance Corporation (IFC), a member of the World Bank Group, and Amundi, a European asset manager, said in a report titled “Emerging Market Green Bonds”.
The bulk of issuances came from the UAE, which more than doubled sales to $8.7 billion, while Saudi Arabia advanced to $ 6.7 billion.
Borrowers in Sub-Saharan Africa increased green bond issuance last year by 125%, albeit from low levels to $1.4 billion from $600 million in 2022.
South Africa remains the most significant issuer within the region, with $900 million in green bonds sold over the year, 58% more than the previous year.
Overall, green bond issuance in emerging markets increased 34% year on year to $135 billion in 2023. Meanwhile, the broader category of global green, social, sustainability and sustainability-linked (GSSS) bonds issuance exceeded $1 trillion last year, matching the all-time high reached in 2021.
The report authors expect growth in emerging market sustainable bonds issuance to continue through 2025, growing 7.1% year over year for GSSS bonds and 7.5% growth for green bonds.
The positive outlook is based on a relatively stable global backdrop of easing inflation without major escalations in geopolitical tensions.
(Editing by Brinda Darasha; brinda.darasha@lseg.com)