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Saudi Sovereign Fund Allocates $19.4 Billion for Green Projects Spending

King Abdullah Financial Center in Riyadh (Asharq Al-Awsat)
King Abdullah Financial Center in Riyadh (Asharq Al-Awsat)
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Saudi Sovereign Fund Allocates $19.4 Billion for Green Projects Spending

King Abdullah Financial Center in Riyadh (Asharq Al-Awsat)
King Abdullah Financial Center in Riyadh (Asharq Al-Awsat)

The Saudi Public Investment Fund (PIF) has earmarked $19.4 billion for eligible green projects, with $5.2 billion allocated by June of this year.

As one of the largest sovereign wealth funds in the world and the investment arm of Saudi Vision 2030, PIF places significant emphasis on the utilities and renewable energy sectors, which are considered strategic. The fund also supports the Saudi Green Initiative and the National Renewable Energy Program under the Ministry of Energy.

On Friday, PIF published the second edition of its Investment Allocation and Impact Report, reaffirming its commitment to transparency and disclosure at various stages of its green financing initiatives. The allocated funds will be directed towards spending on renewable energy projects, green buildings, and sustainable water management.

According to the report, new eligible green projects will soon be added to PIF’s green financing portfolio, including a wide range of initiatives in renewable energy, sustainable water management, green buildings, pollution prevention, energy efficiency, sustainable management of living natural resources and land, and clean transportation.

The report also highlights that all eligible green projects contribute to the United Nations Sustainable Development Goals and are expected to deliver significant environmental benefits.

In October 2022, PIF issued the first green bonds from a sovereign wealth fund globally, including century-long green bonds. This issuance helps diversify the fund’s financing sources and supports green investments that positively impact the Saudi economy.

PIF has been rated “A1” by Moody’s with a positive outlook and “A+” by Fitch Ratings with a stable outlook.

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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)

Russia's central bank has left its benchmark interest rate at 21%, holding off on further increases as it struggles to snuff out inflation fueled by the government's spending on the war against Ukraine.
The decision comes amid criticism from influential business figures, including tycoons close to the Kremlin, that high rates are putting the brakes on business activity and the economy.
According to The Associated Press, the central bank said in a statement that credit conditions had tightened “more than envisaged” by the October rate hike that brought the benchmark to its current record level.
The bank said it would assess the need for any future increases at its next meeting and that inflation was expected to fall to an annual 4% next year from its current 9.5%
Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people's bank accounts to spend. All that is driving up prices.
On top of that, the weakening Russian ruble raises the prices of imported goods like cars and consumer electronics from China, which has become Russia's biggest trade partner since Western sanctions disrupted economic relations with Europe and the US.
High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.
Critics of the central bank rates and its Governor Elvira Nabiullina have included Sergei Chemezov, the head of state-controlled defense and technology conglomerate Rostec, and steel magnate Alexei Mordashov.
Russian President Vladimir Putin opened his annual news conference on Thursday by saying the economy is on track to grow by nearly 4% this year and that while inflation is “an alarming sign," wages have risen at the same rate and that "on the whole, this situation is stable and secure.”
He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”
Nabiullina said in November that while the economy is growing, “the rise in prices for the vast majority of goods and services shows that demand is outrunning the expansion of economic capacity and the economy’s potential.”
Russia's military spending is enabled by oil exports, which have shifted from Europe to new customers in India and China who aren't observing sanctions such as a $60 per barrel price cap on Russian oil sales.