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- $5.2 billion already allocated by the Public Investment Fund (PIF) to eligible green projects as of June 2024.
- Total investment of $19.4 billion earmarked for sustainable initiatives promoting environmental benefits.
- PIF issued the world’s first 100-year green bond, diversifying funding sources and supporting Saudi Arabia’s green economy.
Significant Investment in Sustainable Projects
The Public Investment Fund (PIF) of Saudi Arabia has identified a capital expenditure requirement of $19.4 billion for its eligible green projects, with $5.2 billion already allocated as of June 2024. This commitment is part of PIF’s ongoing dedication to sustainable finance, detailed in its recently published second Allocation and Impact Report.
Focus on Renewable Energy and Green Initiatives
The report highlights substantial investments in renewable energy, green buildings, and sustainable water management projects. Funds allocated thus far are directed toward developments meeting specific eligibility criteria designed to promote environmentally friendly initiatives.
Expansion of Green Finance Portfolio
In the near future, PIF plans to add new eligible green projects to its Green Finance Register. These projects will encompass a wide array of initiatives, including renewable energy, sustainable water management, green buildings, pollution prevention and control, energy efficiency, sustainable management of living natural resources and land use, and clean transportation. All these initiatives align with the United Nations Sustainable Development Goals and are expected to provide significant environmental benefits.
Pioneering Green Bonds
In October 2022, PIF made history by issuing its inaugural green bond, becoming the first sovereign wealth fund globally to do so and launching the world’s first 100-year green bond. This issuance helps diversify the fund’s financing sources while driving impactful green investments across Saudi Arabia.
Strong Creditworthiness
PIF holds strong credit ratings, with an “A1” rating by Moody’s with a positive outlook and an “A+” rating by Fitch Ratings with a stable outlook. These ratings reflect the fund’s robust financial position and its commitment to supporting the Saudi Green Initiative and the National Renewable Energy Program under the Ministry of Energy.
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Background: Green Finance Framework
As part of the global effort to combat climate change, the Kingdom of Saudi Arabia is committed to achieving its green agenda with the goal of reaching net-zero carbon emissions by 2060 and reducing CO₂ emissions by 278 million tons annually by 2030, using 2019 as the base year. PIF is instrumental in supporting the Kingdom to achieve this green agenda, accelerating the diversification of the domestic economy and unlocking new sustainable sectors.
For example, PIF is committed to developing 70% of Saudi Arabia’s renewable energy target by 2030. It is also one of the six founding members of the One Planet Sovereign Wealth Fund initiative, which aims to accelerate efforts toward the transition to a low greenhouse gas economy among sovereign wealth funds and asset managers.
As part of PIF’s role in realizing Saudi Arabia’s commitments, PIF has established its Green Finance Framework, which sets out its strategy and roadmap to catalyze the Kingdom’s green agenda and outlines the projects eligible for green financing in line with international standards.
Published alongside this framework is a Second Party Opinion from DNV, an international accredited registrar and classification company. This confirms that PIF’s Green Finance Framework is aligned with the International Capital Market Association (ICMA) Green Bond Principles 2021 and the Loan Market Association (LMA) Green Loan Principles 2021.
PIF may use this framework as the basis to issue green bonds, sukuk, loans, and other debt instruments. In addition to alignment with these principles, PIF may choose to seek certification in compliance with the requirements of the Climate Bonds Initiative Climate Bonds Standard.