عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Saudi PIF Successfully Issues Inaugural Century Green Bond

Participants attend the Saudi Green Initiative Forum to discuss efforts by the world's top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri/File Photo
Participants attend the Saudi Green Initiative Forum to discuss efforts by the world's top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri/File Photo
TT
TT

Saudi PIF Successfully Issues Inaugural Century Green Bond

Participants attend the Saudi Green Initiative Forum to discuss efforts by the world's top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri/File Photo
Participants attend the Saudi Green Initiative Forum to discuss efforts by the world's top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri/File Photo

The Public Investment Fund (PIF) announced on Thursday its first-ever bond issuance — the century green bond — raising $3 billion to finance or refinance PIF’s green investments. This move comes in line with the Green Finance Framework.

Reuters recently disclosed that the Saudi sovereign fund has hired banks to arrange a debut issuance of multi-tranche dollar-denominated green bonds for the first time, in an effort to achieve the Kingdom’s green aspirations.

PIF green investments include eligible green projects in renewable energy, energy efficiency, sustainable water management, pollution prevention and control, green buildings and clean transportation.

Head of PIF’s Global Capital Finance Division Fahad AlSaif said: “This inaugural green bond issuance is a historic milestone for PIF, marking the establishment of its international capital markets program - one of the PIF’s key objectives. It will also allow PIF to further diversify its sources of debt funding thereby helping to drive impactful investment in Saudi Arabia and internationally.”

He continued: “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. 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 total number of subscription requests exceeded $24 billion - as the bond was more than 8 times oversubscribed - divided over three tranches: the first with a value of $1.25 billion for 5-year bonds, the second with $1.25 billion for 10-year bonds, while the value of the third tranche is $500 million for 100 years.

The strong demand by international investors for PIF’s first issuance reflects confidence in fund’s role as an integral pillar of the Saudi economy and its position as one of the largest and most impactful sovereign wealth funds.

Most Viewed

 
 
Business

Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
TT
TT

Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.