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;