Saudi Arabia’s PIF Commits $19.4 Billion to Green Investments, Boosting Sustainable Projects

The Public Investment Fund (PIF) of Saudi Arabia has committed $19.4 billion to eligible green projects, with $5.2 billion already allocated as of June 2024. This initiative is part of PIF’s ongoing dedication to sustainable finance, as outlined in its recently published second Allocation and Impact Report.

The report highlights significant investments in renewable energy, green buildings, and sustainable water management projects. The funds allocated so far are directed towards developments that meet specific criteria designed to promote environmentally friendly initiatives and support Saudi Arabia’s broader green agenda.

Looking ahead, PIF plans to expand its Green Finance Register to include additional eligible projects, covering a diverse range of initiatives such as renewable energy, sustainable water management, green buildings, pollution prevention, energy efficiency, and clean transportation. These projects align with the United Nations Sustainable Development Goals and aim to deliver substantial environmental benefits.

In a pioneering move, PIF issued its first green bond in October 2022, becoming the world’s first sovereign wealth fund to launch a 100-year green bond. This issuance supports PIF’s goal of diversifying funding sources while driving impactful green investments across Saudi Arabia.

PIF holds strong credit ratings, including an “A1” rating from Moody’s with a positive outlook and an “A+” rating from 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.

As part of its contribution to Saudi Arabia’s green agenda, PIF aims to develop 70% of the Kingdom’s renewable energy target by 2030. PIF is also one of the founding members of the One Planet Sovereign Wealth Fund initiative, which seeks to transition to a low greenhouse gas economy among sovereign wealth funds and asset managers.

PIF has established a Green Finance Framework to support the Kingdom’s green agenda, setting out a roadmap for eligible projects that comply with international standards. A Second Party Opinion from DNV confirms that PIF’s framework aligns with the International Capital Market Association (ICMA) Green Bond Principles 2021 and the Loan Market Association (LMA) Green Loan Principles 2021. This framework will serve as the basis for issuing green bonds, sukuk, loans, and other debt instruments, advancing Saudi Arabia’s ambitions for a sustainable and diversified economy.