The UAE is experiencing significant expansion in its mega projects across key sectors, including infrastructure, renewable energy, and real estate, aligning with a strategic vision that prioritises sustainability in economic policies.
These large-scale developments, alongside a focus on sustainable initiatives supporting climate goals, are expected to drive sukuk and bond issuances in the coming years. Global credit rating agencies, Standard & Poor’s and Fitch, anticipate a greater reliance on these financial instruments, driven by efforts to diversify funding sources and enhance sustainable investments.
Bashar Al Natoor, Managing Director and Global Head of Fitch Ratings’ Islamic Finance Group, noted that while traditional financing remains dominant, mega projects have contributed to the growth of sukuk and bond issuances by generating demand for sustainable funding options. He confirmed that some past projects were partially financed through these instruments.
Al Natoor expects an increasing reliance on sukuk and bonds, as UAE-based public and private institutions explore alternatives to conventional financing. He highlighted upcoming real estate, infrastructure, and renewable energy projects, including Dubai’s budget allocation, where 46% of government spending for 2025-2027 is dedicated to infrastructure. This covers roads, bridges, transportation, parks, and renewable energy facilities.
The expansion of Al Maktoum Airport, announced last year, is a key initiative supporting sustainability and smart mobility. Al Natoor further noted that under its net-zero strategy for 2050, the UAE is launching green projects to promote economic and environmental sustainability, a major driver for the sukuk and bond market.
He emphasised that this approach will lead to higher issuances across sectors, attracting global investors seeking sustainability-linked financial instruments. Zahabia Gupta, Director at S&P Global Sovereign Ratings, added that strong public investment plans, including the USD 35 billion Al Maktoum Airport expansion and the USD 8.2 billion rainwater drainage network, will further support the rise in issuances.
