Skip to content Skip to Search
Skip navigation

Emirates NBD wins first UAE green bond fee waiver

green bond fee waiver Emirates NBD Reuters/Satish Kumar
While Emirates NBD has benefitted from a green bond fee waiver, the scheme is unlikely to have a big impact on the growth of the region’s green debt capital market, one observer says
  • More applications in pipeline
  • But scheme ‘won’t have big impact’
  • ‘Other steps needed’

Emirates NBD has become the first financial institution to benefit from a fee waiver intended to boost sustainability-related debt security issuances in the UAE.

The Dubai Financial Services Authority, which announced the green bond fee waiver during the Cop28 summit last year, said more financial institutions were submitting applications to benefit from the scheme.

However, Bashar Al-Natoor, global head of Islamic finance at Fitch, said the scheme was unlikely to have a big impact on the growth of the region’s green debt capital market.

“The DFSA fee waiver is another step in supporting the ESG [environmental, social and governance] debt capital market development. But the fee waiver alone is not a game changer, as other steps are still to be seen to address key limitations in this growing segment,” he told AGBI.

Al-Natoor said more work on sustainability regulations, frameworks and awareness in the UAE was required to make capital markets more efficient, and a more attractive alternative for investment and funding. 

Global issuance of ESG sukuks totalled $10.5 billion last year, down nearly 5 percent on 2022. The UAE contributed more than 40 percent of the total issuance, followed by Malaysia (28 percent), Saudi Arabia (21 percent) and Indonesia (10 percent). 

Sukuk were developed as an alternative to conventional bonds, which are not considered permissible by many Muslims as they pay interest and may finance businesses involved in activities not allowed under sharia.

Figures from S&P Global Ratings showed that the Middle East was the fastest-growing region in the world last year for conventional green bond issuance, up 150 percent on 2022. 

Global issuance of so-called green, social, sustainability, and sustainability-linked bonds is likely to top $1 trillion this year, with sustainability bonds making up 14 percent of total bond issuance in 2024.

S&P said that it expects sovereign issuance of green bonds to increase in 2024, with the UAE and Saudi Arabia likely to increase the region’s representation in the sustainability bond market.

Fitch Ratings said the total global ESG sukuk market grew in 2023 to reach $36 billion by the end of the year, and is likely to top 7.5 percent of global outstanding sukuk by 2028, up from 4.3 percent last year.

Al-Natoor said: “In the medium term, we expect ESG sukuk growth to continue. However this could be slowed by volatile debt capital markets, governments becoming less willing to pursue sustainable targets, and poor availability of qualified assets.”

Lower oil prices, which Fitch has predicted could be $80 per barrel this year, dropping to $70 in 2025, and falling interest rates could also drive debt issuance, including ESG sukuk, he said.

Latest articles

Flooding in Dubai affected many people's homes. Emaar has promised .free repairs for its residents, and an upgraded sewerage system is planned

Emaar promises free repairs as Dubai launches sewerage system

Emaar Properties is offering free repairs to residents whose homes were damaged during this week’s extreme flooding, as Dubai also announced an AED80 billion ($22 billion) sewerage system. The developer announced on Friday that it would repair all homes in its communities affected by the historic levels of rain, “at no cost to residents”. Emaar’s […]

Construction work in Kuwait. Nurseries, schools and shops are being built for the new residential district of Al Metlaa

Kuwait signs $140m contracts for Al Metlaa development

Kuwait’s Public Authority for Housing Welfare (PAHW) has signed two contracts worth KD42 million ($140 million) to construct public buildings in Al Metlaa, a new residential district north of Kuwait City. Nurseries, stores, schools and shops will be included, state news agency Kuna reported. Electricity connections have been provided for 109 buildings in the district, […]

Iraq gas oil

Iraq to auction 30 oil and gas projects this month

Iraq will auction 30 new oil and gas projects in two licensing rounds before the end of April. The bidding round will be held on April 27, Reuters reported, citing an oil ministry statement. Last October Iraq passed a long-awaited oil and gas law, which will help the country attract more international investments into the hydrocarbon industry and boost government revenues.  Ali Metwally, an […]

Workers at Cano Limon oil field in eastern Colombia. Oil is one of the country's largest exports

UAE strikes Colombia deal to strengthen Latin American links

The UAE has strengthened trade relations with Latin America after signing a comprehensive economic partnership agreement with Colombia, just days after a Cepa deal was struck with Costa Rica. Officials from the UAE and Colombia put pen to paper on an agreement that will cut tariffs and remove trade barriers between the two countries. UAE […]