The UAE is experiencing rapid growth in its mega projects across key sectors like infrastructure, renewable energy, and real estate, all aligned with the nation's strategic focus on sustainability.
This growth is expected to fuel an increase in sukuk and bond issuances, as these sectors become key drivers of the UAE's economic policies aimed at diversifying funding sources and promoting sustainable investments.
Credit rating agencies Standard & Poor’s and Fitch have projected an uptick in reliance on such issuances in the coming years. Bashar Al Natoor, Managing Director at Fitch Ratings, highlighted that while traditional financing methods still dominate, recent projects have driven the demand for innovative funding sources like sukuk and bonds. These financial instruments have already helped fund past projects, and Al Natoor predicts that they will become more central to future financing efforts.
Dubai's 2025-2027 budget reflects this trend, with 46% of government expenditures earmarked for infrastructure projects, including roads, tunnels, and renewable energy initiatives. Notably, the Al Maktoum Airport expansion is a cornerstone of the emirate’s drive for sustainable mobility.
Under its strategic vision for net-zero emissions by 2050, the UAE is launching a series of green projects that are poised to be major drivers of the sukuk and bond market. These green initiatives, along with government projects such as the $35 billion Al Maktoum Airport expansion and the $8.2 billion rainwater drainage network, are attracting global investors interested in sustainability-linked financial instruments.
S&P Global's Zahabia Gupta echoed this sentiment, stating that the surge in issuances will be fueled by robust public investment plans and favorable economic conditions.
News Source: Emirates News Agency
