MENA’s Record-Breaking Green Bonds and Sustainability Sukuk Issued in 2024
In the first eight months of 2024, the MENA region saw a rise in green bonds and sustainability sukuk, showing the increasing global interest in eco-friendly finance. The GCC countries and their banks took the lead, launching important projects that attracted both local and international interest in green and ethical investments.
Qatar’s First Green Bonds: $2.5 Billion
In May, Qatar’s Ministry of Finance issued its first green bonds worth $2.5 billion. The bonds were divided into two parts: $1 billion to be repaid in 5 years and $1.5 billion in 10 years. These bonds offered slightly higher returns than U.S. government bonds—30 and 40 basis points more, respectively. Qatar achieved the lowest extra cost for borrowing compared to any other bond issuer in the Middle East, Central and Eastern Europe, or Africa. Investors showed strong interest, with demand exceeding $14 billion—more than 5.6 times the original offer.
Alrajhi Bank Sustainable Sukuks: $2 Billion
In line with Saudi Arabia’s Vision 2030, Alrajhi Bank issued its first Sustainable Additional Capital (AT1) Sukuk in May, raising $1 billion at an annual profit rate of 6.375%. This sukuk was extremely popular, with investors offering more than $3.5 billion. Earlier in March 2024, the bank also issued another $1 billion sustainable sukuk, to be repaid in 5 years, with an annual profit rate of 5.047%.
Masdar’s Green Bond: $1 Billion
In July, Abu Dhabi’s clean energy company, Masdar, raised $1 billion by issuing green bonds in two parts. Each part was worth $500 million—one set to be repaid in five years with a 4.875% interest rate and the other in ten years with a 5.25% rate. There was high demand, with investors offering 4.6 times more money than needed, totaling $4.6 billion in offers. Masdar will use this money to fund new renewable energy projects and plans to issue up to $3 billion in green bonds to help reach 100GW of renewable energy by 2030.
DIB’s Sustainable Sukuk: $1 Billion
In February, Dubai Islamic Bank (DIB) issued its third Sustainable Sukuk, raising $1 billion. This five-year bond offers a yearly profit rate of 5.243%, with a 95 basis point margin over U.S. Treasury bonds. The demand was strong, with orders totaling $2.5 billion—2.5 times more than the amount offered. The Sukuk was listed on Euronext Dublin and NASDAQ Dubai.
Sharjah Government Sustainable Bond: $750 million
In March 2024, the Sharjah Government raised $750 million by issuing a 12-year sustainable bond in U.S. dollars. Investors showed strong interest, with demand going over $4 billion. Around 67% of the investors were from outside the region. The bond was priced 1.95% higher than U.S. government bonds.
Emirates Islamic Sustainability Sukuk: $750 million
In June 2024, Emirates Islamic, part of Emirates NBD, issued its first sustainability Sukuk worth $750 million as part of its $2.5 billion issuance program. It offers a yearly profit rate of 5.431% and was priced 1% higher than five-year U.S. government bonds. The Sukuk was in high demand, attracting investors from around the world, with 44% coming from outside the Middle East and North Africa (MENA). It was oversubscribed by 2.8 times.
NBK Green Bond: $500 Million
In June, the National Bank of Kuwait (NBK) launched its first green bond, raising $500 million – the first of its kind in Kuwait. The bond will last for six years, but NBK can choose to repay it after five years. It was very popular, attracting $1.5 billion in orders, which is three times more than expected. U.S. investors made up almost half of the buyers (49%), followed by investors from the Middle East (26%), the UK (18%), Europe (5%), and Asia (2%).
Warba Bank Sustainability Sukuk: $500 Million
In August, Warba Bank issued $500 million in sustainable Sukuk (Islamic bonds) on Nasdaq Dubai. This was Kuwait’s first sustainability Sukuk and part of a larger $2 billion program. Demand was high, with orders totaling $1.8 billion—3.6 times more than the amount offered. The five-year Sukuk aims to support sustainable projects that align with global sustainability goals. In September, the Sukuk was also listed on the London Stock Exchange.
Aldar Investment Properties (AIP) Green Sukuk: $500 Million
In May, AIP, a part of Aldar Properties, issued its second green Sukuk, worth $500 million. This is part of a larger $2 billion plan to issue trust certificates. The Sukuk will last 10 years and offers a 5.5% interest rate. It was very popular, with demand being four times higher than the amount offered. The money raised will be used to pay off old loans and extend the time for repaying debt.
QIIB’s “Oryx” Sustainable Sukuk: $500 Million
In January 2024, QIIB became the first institution in Qatar to issue a sustainable Sukuk, raising $500 million through the “Oryx” Sukuk. This five-year Sukuk is part of QIIB’s $2 billion Sukuk program. Investors showed great interest, with offers totaling over $4 billion. The Sukuk offers a yield of 5.247% per year and was priced 1.2% above the five-year U.S. Treasury rate. It is listed on the London Stock Exchange.
Published: 21st October 2024
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