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The SCA in the UAE has announced that companies issuing green bonds in 2023 will be granted a waiver on registration fees.

by Swati Gupta

June 7, 2023 23

According to the Securities and Commodities Authority (SCA) in the UAE, companies that issue green bonds in 2023 will be granted an exemption from registration fees. This move aims to encourage more corporates to participate in sustainable financing and contribute to the country’s environmental goals.

The SCA’s decision to waive registration fees for green bond issuances demonstrates its commitment to promoting sustainable finance and supporting the UAE’s transition towards a greener economy. By providing this incentive, the SCA aims to attract more companies to issue green bonds and mobilize capital for environmentally friendly projects.

Green bonds have gained significant traction in recent years as an effective tool for financing projects with positive environmental impacts. These bonds enable investors to support initiatives focused on renewable energy, energy efficiency, waste management, and other sustainability objectives. By exempting registration fees for green bonds, the SCA is facilitating the growth of this market segment and encouraging companies to incorporate sustainable practices into their business operations.

The UAE has been proactive in promoting sustainable finance and green initiatives. The country has set ambitious targets to reduce carbon emissions, increase renewable energy capacity, and enhance environmental conservation efforts. Encouraging the issuance of green bonds aligns with these objectives and reinforces the UAE’s commitment to sustainable development.

By exempting registration fees, the SCA aims to remove a potential financial barrier for companies considering green bond issuances. This cost-saving measure can make green financing more attractive and financially viable for corporates, driving greater participation in sustainable projects. It also sends a positive signal to investors, highlighting the government’s support for sustainable investments and the UAE’s position as a favorable destination for green finance.

The SCA’s exemption applies specifically to green bonds issued in 2023, indicating the urgency to accelerate sustainable financing efforts and capitalize on the growing global demand for environmentally responsible investments. As awareness of climate change and environmental challenges continues to rise, investors are increasingly seeking opportunities to align their portfolios with sustainable objectives. Green bonds provide an avenue for companies to access this capital and demonstrate their commitment to addressing environmental issues.

The exemption from registration fees underscores the SCA’s recognition of the importance of sustainable finance in driving economic growth while protecting the environment. It is expected to encourage UAE corporates to explore green bond issuances and expand the range of sustainable investment opportunities available in the country. The move also positions the UAE as a frontrunner in promoting sustainable finance in the region and enhances its reputation as a responsible and forward-thinking market.

As companies take advantage of this exemption and venture into green bond issuances, they will play a crucial role in advancing sustainable development in the UAE. The funds raised through these bonds can be utilized to finance renewable energy projects, green infrastructure, and other initiatives that contribute to the country’s environmental objectives. The SCA’s initiative serves as a catalyst for mobilizing capital towards sustainable projects and accelerating the transition to a low-carbon and resource-efficient economy.

In conclusion, the exemption of registration fees for green bond issuances in 2023 by the SCA reflects the UAE’s commitment to sustainable finance and environmental stewardship. This incentive is expected to drive increased participation from UAE corporates in green bond markets, promoting the flow of capital towards sustainable projects and reinforcing the country’s position as a leader in sustainable development.