Saudi Arabia’s PIF raises $3bn through debut green bond

Kingdom's sovereign wealth fund aims to finance its green investments

A field of solar panels at the King Abdulaziz City of Sciences and Technology in Riyadh. Reuters

Saudi Arabia’s Public Investment Fund has raised $3 billion through its first bond issuance as the kingdom's sovereign wealth fund considers financing or refinancing its green investments in renewable energy, energy efficiency, green buildings and clean transport.

The bond was issued in three tranches and was more than eight times oversubscribed, with orders exceeding $24bn, the state-run Saudi Press Agency reported on Thursday.

“The issuance is a continuation of PIF's initiatives to support Saudi Arabia’s green agenda and follows previous announcements … such as the launch of the Mena Voluntary Carbon Market and the various renewable projects PIF is spearheading as part of its commitment to develop 70 per cent of Saudi Arabia’s renewable energy capacity outlined by Saudi Vision 2030,” it reported.

Saudi Arabia, the Arab world’s largest economy, is developing several new renewable energy projects as it aims to boost its clean energy capacity and become carbon neutral by 2060.

Last month, the kingdom launched five new renewable energy projects with a total capacity of 3.3 gigawatts.

“The strong investor support for the issuance is a testament to PIF’s strong financial profile, world-class governance, exceptional green projects and the diversity of its business and portfolio,” PIF’s global capital finance division head Fahad AlSaif said.

“It also reflects PIF’s leading role in transforming Saudi Arabia’s economy and the broad range of green and sustainable investment opportunities that this transformation provides.”

The PIF is one of the world’s largest sovereign wealth funds, with about $620bn in assets under management.

It is diversifying its investment portfolio as it seeks to grow its asset base to more than $1 trillion by 2025.

The sovereign wealth fund is at the centre of the Saudi Vision 2030 initiative to diversify the country’s economy and reduce its reliance on hydrocarbons.

The PIF is also the biggest shareholder in Riyadh utility developer Acwa Power, which is developing several renewable energy projects around the globe.

The bond issuance “will also allow PIF to further diversify its sources of debt funding, thereby helping to drive impactful investment in Saudi Arabia and internationally”, Mr AlSaif said.