Qatar issues green bonds worth $2.5bn

Qatar has issued green bonds in two tranches totaling $2.5 billion, according to official data.

Citing a release from the International Financing Review, Reuters reported that the operation is the Gulf state’s first external debt issuance in four years.

According to the IFR report, Qatar sold five-year offerings worth $1 billion with a yield of 30 basis points above US treasury bonds, and ten-year debt securities worth $1.5 billion with a yield of 40 basis points.

This comes several months after global professional services network KPMG encouraged the Gulf country to issue green bonds and adopt sustainable financing mechanisms, saying that this step would help the country achieve its sustainability goals.

The report also showed that Qatar reduced the initial indicative rate to 70 basis points over US treasury bonds for five-year debt securities and 80 basis points over US treasury bonds for 10-year offerings after receiving total orders exceeding $10.9 billion.

On another note, new data revealed that in the first quarter of 2024, Qatar recorded a merchandise trade balance surplus of 53.2 billion Qatari riyals ($14.6 billion), down from 68.4 billion riyals in the same quarter last year.

Issued by the country’s National Statistics Center, the analysis also disclosed that the value of Qatar’s total exports, including foreign sales of domestic goods and re-exports, amounted to 87.6 billion riyals, reflecting an 8.6 percent drop compared to the corresponding period in 2023.

On the other hand, during the same period, the value of Qatar’s imports stood at 34.4 billion riyals, reflecting a 25.4 percent surge in comparison to the first quarter of 2023.

When asked about the issuance of external debt in January, Qatar’s Finance Minister Ali Al-Kuwari, said: “We’re ready to do it very soon.”

Speaking to Bloomberg Television on the sidelines of the World Economic Forum in Davos at the time, the official highlighted that Qatar is “not hungry for money,” but it will pursue the issuance “mainly to send a strong statement” in combating climate change.

One of the world’s biggest producers of liquefied natural gas, Qatar has not issued eurobonds since early 2020, when it sold $10 billion of debt.

In 2022, the Gulf state’s central bank announced plans to implement strategic actions, including facilitating green bond issuance and advancing cooperation with the Qatar Development Bank, to promote diversification efforts. The aim is to fund projects to reduce carbon and other planet-warming emissions.