14 January 2026 at 11:45 pm IST
A new regional sustainable finance report showed that the Middle East and North Africa (MENA) sustainable finance market reached US $35.1 billion in 2025, with Saudi Arabia emerging as the largest issuer by volume, surpassing the United Arab Emirates for the first time. This milestone reflects significant progress in the region’s shift toward environmentally and socially aligned capital markets. Saudi Arabia’s rise to the top was supported by the publication of its Green Financing Framework in 2024, which helped provide regulatory clarity and encouraged issuance of green and sustainability‑linked instruments. The Kingdom accounted for around $19.7 billion of the region’s total sustainable finance issuance last year, marking a substantial leap in climate‑aligned investment and signalling expanding appetite for green capital. The broader MENA market has expanded roughly sevenfold since 2020, even though total issuance in 2025 was slightly below the 2023 peak due to global economic headwinds. The growth trend underscores how regional financial systems are adopting sustainability concepts, with green‑labelled instruments — especially those funding renewable energy, low‑carbon infrastructure and water‑efficiency projects — representing a growing share of overall issuance. Financial institutions played a leading role in this development, contributing nearly half of all sustainable finance issuance as banks increased underwriting and lending activity tied to sustainability‑linked bonds and loans. Despite Saudi Arabia’s leading position in issue volume, UAE banks remain influential in shaping the regional market and supporting ambitious long‑term sustainable finance targets, including the UAE Banking Federation’s goal of mobilising AED 1 trillion by 2030.
