Scaling Up Sustainable Finance in the Middle East and North African Region

The Middle East and North African (MENA) region is particularly vulnerable to the effects of climate change, has a key role to play in global climate goals, and faces a series of challenges related to the social and governance dimension. Against this background, this chapter analyzes where we stand with respect to the development of sustainable finance in the region and how it could be scaled up. We start by looking at the broader macrofinancial context and then focus on sustainable financial market segments, also in comparison with other areas. Then, we discuss lessons learned from relevant initiatives in and outside of the region, tying these lessons to the MENA context. We conclude by providing an overview of innovative tools such as blended finance, catastrophe bonds, and securitization, which could unleash their potential, particularly in a region where derisking mechanisms are needed to attract investors.