Aldar Properties recently announced a $290 million tap issue
of its green sukuk, positioning it as a milestone in sustainable finance within
the UAE real estate sector. However, industry experts and analysts express
scepticism, questioning whether this financial move represents a true
commitment to environmental sustainability or merely serves as corporate
greenwashing.
Aldar’s Green Sukuk Tap Announced
Aldar Properties, the UAE-based real estate developer,
officially launched a $290 million tap of its green sukuk on 15 September 2025.
This issuance is part of Aldar’s ongoing efforts to finance environmentally
friendly projects, as stated in the company’s press release cited by Rahim
Hassan of Gulf Property News.
“This sukuk is intended to finance projects aligned
with Aldar’s Green Building Standards and the UAE’s Net Zero by 2050 strategic
goals,”
the spokesperson noted.
The Promise of Sustainable Finance in UAE Real Estate
Sukuk, an Islamic finance instrument, has increasingly been
used to attract investments into green projects. The regional market has
witnessed a surge in green sukuk issuances, with Aldar being one of the largest
contributors. According to Fatima Al Zarooni from Emirates Financial Review,
“Aldar’s issuance aims to set a benchmark for responsible and sustainable
investment in the real estate sector, which is traditionally carbon-intensive.”
Allegations and Concerns Over Greenwashing
Despite these ambitions, critical voices from environmental
NGOs and independent analysts question the depth of Aldar’s sustainability
commitments. A report by journalist Michael Turner for The Green Observer
reveals concerns that Aldar’s projects financed through the sukuk may not fully
comply with rigorous environmental standards.
“There is a growing trend of ‘greenwashing’
where companies use green labels to attract capital without genuine ecological
benefits,”
Turner warns.
Omar Al Qasimi, an environmental economist quoted in The
EcoJournal, elaborates,
“The real test lies in transparently reporting the
environmental impact and third-party verification of green claims. Without
this, such large-scale sukuk issuances risk misleading investors and damaging
credibility in the green finance sector.”
Aldar’s Response to Criticism
In a counter statement reported by Layla Najjar of Middle
East Business Insight, Aldar’s Chief Sustainability Officer, Amina Saeed,
defended the company’s approach:
“Our green sukuk is audited by leading
sustainability consultants and adheres to internationally recognised Green Bond
Principles. We remain committed to transparency and long-term environmental
stewardship.”
Market and Investor Reaction
The financial market’s response has been mixed since the
announcement. While initial subscription rates exceeded expectations, some
investors seek more clarity on how exactly the funds will be deployed.
According to Simon Green, a fixed income analyst at Capital Strategies,
interviewed by Financial Horizons,
“The appetite for green bonds and sukuk
remains strong; however, investors are increasingly demanding detailed impact
metrics and accountability.”
UAE’s Green Agenda and Real Estate’s Role
The UAE government has articulated ambitious climate
targets, including achieving net zero carbon emissions by 2050, which underpin
market enthusiasm for green finance instruments. Aldar’s issuance aligns with
broader governmental policies encouraging sustainable urban development, as
outlined by Dr. Hassan Al Mansouri in his policy analysis for Gulf Environment
Watch.
However, Dr. Al Mansouri cautions,
“Real estate development
must be carefully managed to avoid unintended consequences such as overbuilding
or green-lite projects that do not materially reduce emissions.”
Broader Implications for Green Finance in MENA
Aldar’s sukuk tap highlights both the opportunities and
challenges facing green finance in the Middle East and North Africa (MENA)
region. While the capital raised can accelerate the transition to low-carbon
infrastructure, the sector’s credibility depends on strict transparency and
governance. Fatima Al Zarooni adds,
“The region’s financial markets must learn
from global best practices to ensure green securities are truly additional and
impactful.”
Aldar Properties’ $290 million green sukuk tap represents a
significant development in the UAE’s sustainable finance landscape. However,
balancing genuine sustainability with market expectations and regulatory
scrutiny remains a complex task. Continuous monitoring of Aldar’s project
outcomes and enhanced disclosure will be necessary to differentiate true
environmental commitment from potential corporate greenwashing.
