iPhone | iPad
Android
Huawei
Airline spokesperson confirms it is voluntary for Emirates Group employees to sign up for unemployment insurance
KT APPDOWNLOAD
GCC takes lead in ESG sukuk issuance
Reuters file photo
The sukuk issued by Riyad Bank was the world’s first sustainability-linked Additional Tier 1 sukuk.
GCC-based financial institutions took the lead in environmental, social and governance (ESG) sukuk issuance, comprising green and sustainability-linked sukuk in the first quarter of 2022, according to global data provider Refinitiv.
The issuances, most of which came from the energy and utilities sectors, reached $2.4 billion in Q1 2022, slightly lower than the $2.5 billion issued during the same period in 2021. The debut issuance of $900 million from Bahrain-based Infracorp, the infrastructure investment arm of Gulf Finance House, was the largest ESG sukuk issued during the quarter.
Two other debut issuances, also from financial institutions, came from Saudi Arabia; the Saudi National Bank and Riyad Bank issued sustainability-linked sukuk worth $750 million each, Refinitiv said in a report.
The sukuk issued by Riyad Bank was the world’s first sustainability-linked Additional Tier 1 sukuk. The proceeds of the issuance are expected to provide Shariah-compliant financing and refinancing for certain sustainable projects, according to the Bank’s Sustainable Finance Framework.
With governments in the region seeking to invest heavily in the renewables sector and corporates incorporating ESG principles in their operations and financing, ESG investment opportunities are rapidly emerging in GCC markets, reshaping the region’s financial landscape.
Issuers in the region have also come under pressure from foreign investors, mainly from Europe and the US, to cater to demand for investments classified as “green” or “sustainability-linked”, which could eventually become a point of access for tapping international capital markets.
ESG sukuk issued by GCC-based entities, which began in 2018, has reached a total value of $10.6 billion, or 59 per cent of cumulative global issuance up to Q1 2022. Saudi Arabia has now become the largest market for ESG sukuk, worth a total of $7.9 billion
In March, Qatar’s Ministry of Finance announced the government’s plans to issue international green bonds, having held talks with lead arrangers back in January. The Saudi government and the Saudi sovereign wealth fund, the Public Investment Fund, are also preparing to issue their debut green bonds this year, with the objective of diversifying and expanding their investor bases in addition to funding the Kingdom’s transition to a greener economy.
Some of the region’s regulators have also been working to incorporate ESG bonds and sukuk within their capital market regulations. The Qatar Financial Centre launched the GCC’s first sustainable sukuk and bonds framework to further develop the local debt market.
“The aim of this framework is to encourage the further development of the local debt capital market by diversifying options for borrowers and investors and by laying a strong foundation for building trust between these stakeholders,” said QFC Authority CEO Yousuf Mohamed Al Jaida.
Oman’s Capital Market Authority (CMA) is developing its bonds and sukuk regulation, which will also cover sustainable and responsible investments (SRI), including but not limited to social, sustainable, green and, for the first time, blue sukuk.
—issacjohn@khaleejtimes.com
More news from
For Dh14,500, new entrants to this free zone will get their instant business licence, one investor visa, and the flexibility to combine up to three activities from 1,500 options
The programme is done in cooperation with various relevant government sectors to serve the guests from their arrival until their departure
Reigning champion Swiatek is attempting to become the first woman to successfully defend the title in Paris in 16 years
Now one million strong, the Filipino community is the third largest expat population in the UAE
The Bollywood star made his comeback after a hiatus of 4 years with the action-thriller 'Pathaan' which was released in January this year
Manchester City are eyeing their first Champions League title after finishing runners-up in 2021, while Inter are looking to add to their three titles won in 1964, 1965 and 2010
An expat is given 60 days to apply for his dependents' residence visas after flying into the country under an entry permit