Sustainable bond issuance in the Middle East is expected to remain strong in 2026, with volumes projected to reach between $20 billion and $25 billion, according to S&P Global Ratings. The forecast follows a year marked by global trade volatility and economic uncertainty, yet investor appetite across the region has remained resilient.
In 2025, conventional bond issuance by corporates and financial institutions in the Middle East increased by 10%–15%, reaching $81.2 billion. Sustainable bond issuance in the region also recorded growth of about 3%. This performance stands in contrast to global trends, where worldwide sustainable bond issuance declined by 21% during the same period, underscoring the Middle East’s relative outperformance.
Growth in 2025 was largely supported by Gulf Cooperation Council (GCC) countries, particularly Saudi Arabia and the United Arab Emirates. Strong issuance activity in these markets helped offset a slowdown in Turkiye. Overall, sustainable bond activity in the Middle East remains highly concentrated, with Turkiye, Saudi Arabia, and the UAE accounting for more than 90% of the regional market.
Saudi Arabia and the UAE dominate the bond segment specifically, together representing around 80% of total sustainable bond issuance by value in 2025. Turkiye, meanwhile, plays a different role in the regional sustainable finance landscape. In that country, sustainable loans outweigh bond issuance. Sustainable loan issuance in Turkiye accounted for approximately 60%–65% of the regional market by value and 70%–75% by volume.
Although labeled bond issuance in Turkiye slowed significantly in 2025 due to reduced activity by banks, renewable energy projects continued to expand across both loan and bond markets. Growth in wind and solar capacity could help support renewed issuance momentum in 2026. In contrast, Saudi Arabia and the UAE maintained resilient issuance levels despite periods of market volatility.
A key highlight of 2025 was the rapid expansion of sustainable sukuk—Shariah-compliant instruments designed to finance projects with environmental or social benefits. Total sustainable sukuk issuance in the Middle East reached a record $11.4 billion in 2025, up from $7.9 billion in 2024. These instruments now account for more than 45% of regional sustainable bond issuance by value and over 40% by number of transactions.
Saudi Arabia and the UAE continue to lead sukuk activity, reflecting the central role of Islamic finance in Gulf capital markets. Guidance published by the International Capital Market Association in April 2024 on green, social, and sustainability sukuk has helped improve transparency and market standards. Additional regulatory and government initiatives across the region are expected to further support growth in 2026, positioning sustainable sukuk as a key driver of Middle East capital market development.