Dubai Electricity and Water Authority (DEWA):

• Amount: $1 billion Green Sukuk (2017)
• Usage: Construction of the Mohammed bin Rashid Al Maktoum Solar Park, one of the largest solar energy projects globally.

Islamic Development Bank (IsDB):

• Amount: $1.25 billion Green Sukuk (2018)
• Usage: Financing renewable energy and energy efficiency projects in member countries.

Majid Al Futtaim:

• Amount: $600 million Green Sukuk (2019)
• Usage: Financing sustainable projects, including energy-efficient lighting and water-saving systems.

These deals demonstrate the potential of Green Sukuk in the region, especially with the upcoming COP28 in the UAE.

Gulf Countries Are Taking Steps to Address the Challenges

Challenges:

• Lack of Standardization: Difficult for investors to compare different issuances.
• Limited Supply of Projects: ESG and green projects that meet Shariah-compliant financing requirements are scarce.
• Complexity: Shariah-compliant financing structures pose challenges for issuers and investors.

Government Initiatives:

• UAE & KSA Efforts: Developing policy and standardizing Green Sukuk through High-Level Working Groups.
• Sustainable Finance Frameworks: UAE, Qatar, and Saudi Arabia have established frameworks to enhance the local sustainable finance market.
• Government Support Initiatives: Gulf countries are committed to addressing these challenges to fuel sustainability.

How ESG and Green Sukuk Might Enable Gulf Countries to Deepen Their Green Investments in Africa

• Cross-Border Financing:
  Net Zero Target 2050: Gulf Cooperation Council (GCC) governments prioritize social and environmental financing across borders.
• Deepening Investments: ESG and Green Sukuk enable Gulf countries to mobilize private sector co-financing and bridge the green financing gap in Africa.
• Risk Management: Green Sukuk allows sharing of risk and rewards with private sector co-developers or African governments, boosting investor confidence.

The deployment of Green and ESG Sukuk will grow as regulatory and capacity gaps are bridged, opening new opportunities for the Gulf region to pursue alternative financing mechanisms globally.