Saudi Arabia overtakes UAE as MENA sustainable finance tops $35bn

Saudi Arabia has overtaken the United Arab Emirates (UAE) as the largest issuer in the Middle East and North Africa’s sustainable finance market, as total regional issuance reached $35.1 billion in 2025, according to a new report from Bloomberg Intelligence.

The report shows that MENA sustainable finance issuance has expanded sevenfold since 2020, underscoring the sector’s rapid structural evolution despite a moderation in volumes last year. Issuance in 2025 was 18 per cent below its 2023 peak, a slowdown Bloomberg Intelligence attributed to global market headwinds rather than regional weakness.

Saudi Arabia emerged as the region’s largest issuer by volume in 2025, reaching $19.7 billion and overtaking the UAE. The report said the Kingdom’s rise was supported by the publication of its Green Financing Framework in 2024, which helped provide regulatory clarity and accelerate capital mobilisation at scale.

The findings highlight a shift in the MENA sustainable finance market away from a predominantly sovereign-led model towards a more diversified ecosystem anchored by financial institutions and energy-related issuers. Financial companies accounted for almost 50 per cent of total issuance in 2025, up from 32 per cent in 2020, reflecting increased underwriting and lending activity as banks moved to decarbonise balance sheets and adopt sustainable finance taxonomies.

Green-labelled instruments represented the largest share of issuance, increasing by 60 per cent year on year to $25.8 billion. Capital was largely directed towards renewable energy, low-carbon infrastructure and water-efficiency projects aimed at strengthening climate adaptation and resilience across the region.

Bloomberg Intelligence noted that investment opportunities are expected to broaden further as MENA countries expand data centre capacity, increasing demand for energy-efficient and climate-resilient infrastructure.

Banks drive MENA sustainable finance

While Saudi Arabia led issuance volumes, UAE financial institutions continued to play a central role in the bank-led expansion of sustainable finance. Lenders including First Abu Dhabi Bank and Emirates NBD were prominent through underwriting and lending activity across green bonds, sustainability-linked instruments and loans. The UAE Banking Federation’s target of mobilising AED1 trillion in sustainable finance by 2030 continues to underpin long-term growth expectations.

Grace Osborne, ESG analyst at Bloomberg Intelligence, said the market has matured rapidly over the past five years. “MENA’s sustainable finance market has matured rapidly over the past five years, driven by government initiatives, supportive regulations and increased investor demand,” she said.

“While issuance eased in 2025 in line with global trends, the shift toward bank-led and green-labelled financing reflects a more durable market structure well positioned for further growth.”

The report also pointed to ongoing regulatory progress across the region, while noting that the absence of a harmonised regional taxonomy continues to limit the classification of transition activities. As markets move towards disclosures aligned with International Sustainability Standards Board standards, forward-looking climate risk assessment and transition planning are expected to become increasingly important for issuers seeking sustainable capital.

Bloomberg Intelligence added that rising investment in AI-driven data centres is likely to sharpen the focus on energy efficiency, water security and climate-resilient infrastructure, reinforcing long-term demand for sustainable finance across MENA.