Saudi Arabia: UAE loses top spot in MENA green finance

Saudi Arabia has become the largest provider of sustainable finance in the Middle East and North Africa, overtaking the United Arab Emirates, as total regional issuance reached $35.1 billion in 2025, according to Arabian Business on January 13th via a new report from Bloomberg Intelligence.

Saudi Arabia led the market in 2025 with the issuance of $19.7 billion, pushing past the UAE for the first time. Bloomberg Intelligence said the rise was supported by the launch of Saudi Arabia’s Green Financing Framework in 2024, which helped give clearer rules and made it easier to raise large amounts of capital.

The growth marks a major shift in the region’s green finance market, which has expanded rapidly over the past five years despite a slowdown last year, the report revealed. 

Bloomberg Intelligence found that sustainable finance issuance across MENA has grown seven times since 2020. Volumes in 2025 were lower than the 2023 peak, declining by 18%, but the slowdown was attributed to weak global market conditions rather than issues within the region itself.

The report shows the market is also changing in structure. Sustainable finance in MENA is no longer driven mainly by governments. Instead, banks and energy-related companies are now playing a bigger role. Financial institutions accounted for nearly half of all issuance in 2025, up from about a third in 2020.

Green-labelled finance made up the largest share of the market. Issuance of these instruments rose by 60% from a year earlier to $25.8 billion. Most of the money was invested in green energy, cleaner infrastructure, and water-saving projects, which are seen as key to helping the region deal with climate risks.

While Saudi Arabia led by volume, banks in the UAE remained important drivers of growth. Major lenders such as First Abu Dhabi Bank and Emirates NBD were active in arranging and funding green bonds and sustainability-linked loans. 

Grace Osborne, an ESG analyst at Bloomberg Intelligence, said the region’s sustainable finance market has developed quickly. She said stricter rules, government support and rising investor interest have helped build a more stable market. 

“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 added. 

The report also highlighted ongoing regulatory progress, but noted that the lack of a single regional standard makes it harder to label some transition projects. As countries move towards clearer climate reporting rules, issuers are expected to focus more on long-term climate risks and planning.

Moreover, according to the report, increased investment in data centres, driven by artificial intelligence, is likely to create demand for energy-efficient and climate-ready infrastructure, supporting further growth in sustainable finance across MENA.

Arabian Business, Maghrebi.org