A new report by Bloomberg Intelligence indicates that the sustainable finance market of the Middle East and North Africa has reached $35.1 billion in 2025 due to financial institutions and energy-related issuers.
The report established that MENA sustainable finance issuance has increased by seven times since 2020, although the amount decreased 18 per cent since its high in 2023 due to global market headwinds.
The sector has been overtaken by financial institutions, which contribute to almost half of issuance, compared to 32 percent in 2020, due to greater regulatory encouragement and lending demand as banks embrace sustainability frameworks and decarbonize their balance sheets.
Saudi Arabia became the biggest issuer in the region in 2025 with an issuance of $19.7 billion, which is aided by the 2024 Green Financing Framework, and surpassed the UAE.
Green-labelled instruments, the biggest segment, surged by 60 percent to $25.8 billion, funding renewable energy, low-carbon infrastructure, and water-efficiency projects, with growing demand linked to regional data center expansion.
UAE banks such as First Abu Dhabi Bank and Emirates NBD were instrumental in the underwriting and lending process, which promoted sustainability-related instruments and green bonds.
The UAE Banking Federation’s Dhs1 trillion sustainable finance target by 2030 depicts expectations of long-term growth, with Bloomberg Intelligence estimating a potential $2 trillion opportunity across renewables, water, and low-carbon infrastructure.
ESG analyst at Bloomberg Intelligence, Grace Osborne, said, “While issuance eased in 2025 in line with global trends, the shift toward bank-led and green-labelled financing reflects a more durable market structure well positioned for further growth.”
She also said that regulatory advances across the region were enhancing the bases of future development, but the absence of a harmonized regional taxonomy restricts visibility of transition activity classification.
The report further observed that the impact of the adoption of disclosures aligned to the International Sustainability Standards Board, climate risk assessment, and transition planning is anticipated to become a significant point of differentiation among issuers who seek sustainable capital.
The increase in AI-based data center investments will strengthen the emphasis on energy efficiency, water security, and climate-resilient infrastructure.
