The Dubai Financial Services Authority (DFSA), the independent regulator of the Dubai International Financial Centre (DIFC), and the Hong Kong Monetary Authority (HKMA), Hong Kong’s central bank, have published a joint research report, Scaling Sustainable Debt in Emerging Markets, with BloombergNEF as a knowledge partner.
The report examines the potential of labelled debt, including green, blue, social, and sustainability-linked bonds, to support sustainable development in emerging markets.
The research finds that sustainable debt markets across the Middle East and North Africa (MENA) and emerging Asia Pacific (APAC) have significant growth potential.
Many issuers and borrowers currently finance sustainable projects with unlabelled instruments.
Opportunities for expansion include government guidance to ease market entry, greater corporate issuance, and broader use of sustainable debt beyond conventional labels and structures.
The report includes three case studies illustrating innovation in sustainable finance: a blue bond from DP World, a sustainability-linked loan bond from Emirates NDB, and long-tenor green bond and loan from MTR Corporation Limited.
Regulators in MENA and emerging APAC are increasingly supporting the development of transition and social finance frameworks, stronger disclosure standards, and innovative sustainable instruments.
In the UAE, initiatives such as the UAE Energy Strategy 2050 and the Dubai Clean Energy Strategy 2050 aim to diversify the energy mix, reduce carbon emissions, and position the country as a regional hub for green and transition finance.
The UAE Sustainable Finance Working Group, of which the DFSA is a founding member, has issued draft principles for climate transition planning to help financial institutions create credible and effective transition plans.
Mark Steward, Chief Executive of the DFSA, said:
“This research provides valuable insight into how sustainable debt is evolving across the MENA and emerging APAC regions. The US$94 billion issuance record in 2024 reflects growing investor confidence and the resilience of our markets.”
Eddie Yue, Chief Executive of the HKMA, said:
“Sustainable debt is a promising tool for bridging the multi-trillion-dollar climate financing gap in emerging markets. Through this joint research, we aim to explore solutions to remove the barriers faced by issuers and identify opportunities for growth.”
Featured image credit: Edited by Fintech News Middle East, based on image by thanyakij-12 via Freepik
