Is Green Sukuk a Viable Option for Clean Energy Initiatives in the GCC?
Type
E-journal
Date
18 Nov 2014
Jurisdiction
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates
Taxonomy
Islamic Finance, General Environmental Law, General Natural Resources, Energy & Utilities Law
Copyright
LexisNexis
Relevant company
Latham & Watkins LLP
Analysis
A number of Gulf Cooperation Council (GCC) governments, including those in the UAE and Saudi Arabia, have set ambitious clean energy and energy efficiency targets. As the fastest growing region in the world, the GCC's population is expected to grow more than 53 million by 2020. Substantial amounts of investments will be required to finance the clean energy and energy efficient projects necessary to meet the needs of the future population.
Capital markets allow investors a low-cost alternative
Green bonds, which tie the proceeds of the bond to environmentally friendly investments, have been used to finance green projects since 2008, when the World Bank pioneered the first-ever green bond. Since then, the World Bank has raised US $6.4 billion in green bonds through 67 transactions in 17 currencies.
Although historically international agencies have issued green bonds, the private sector has begun to use green bonds to finance their green activities.