While the other articles in this month’s newsletter focus on some of the key sustainability investments and physical projects underway in the Middle East, here we explore the expansion and importance of green financing in the region.
Saudi Arabia announced in late September 2021 its intention to release and sell its first green bond in early 2022. More details continue to be released to the international investor audience, such as the national Public Investment Fund’s (PIF) intention to funnel proceeds from the green bond into sustainable ventures like the Red Sea tourism megaproject. Already, the bond is being met with keen interest from asset managers from across the world, who are eager to know more about the exact direction – and overall appetite – that Saudi Arabia has in mind for this pivotal green financing vehicle.
Given that Saudi Arabia has made its 2060 net-zero pledge, yet still maintains the highest carbon-dioxide emissions per capita among all the G-20 countries, it’s not difficult to imagine further green bonds being issued quickly and enthusiastically, if this initial offering is well received.
The UAE, which is similarly keen to diversify its economy and financing apparatus away from hydrocarbon reliance, is also on the road to greener investment pastures. 20th November saw the Dubai Financial Services Authority (DFSA) launch a new task force dedicated to driving up standards of sustainable finance across the region and wider region. The Task Force on Sustainable Finance (TFSF) aims to support the application and adoption of existing best practices and new financing vehicles that will encourage the kind of long-term ESG (Environmental, Social, and Governance) improvements that are not just profitable, but essential.