Saudi Electricity mulls green bond sale amid Arab debt push

Saudi Electricity mulls green bond sale amid Arab debt push
Saudi Electricity said it had identified a portfolio of eligible projects which are qualified under its Green Sukuk. (SPA)
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Updated 10 September 2020

Saudi Electricity mulls green bond sale amid Arab debt push

Saudi Electricity mulls green bond sale amid Arab debt push
  • A green bond is a fixed-income instrument aimed at raising money for climate and environmental projects

LONDON: Saudi Electricity plans to hold investor calls this week ahead of a potential green Islamic bond sale.

The utility is among a number of regional corporations and governments seeking to tap international debt markets to raise funds.

It follows publication of its Green Sukuk Framework (GSF) aimed at mitigating climate change.

The bond sale is expected to raise between $1 billion and $1.25 billion with dual-tranche green sukuk comprising five and 10-year tranches, a document showed on Thursday.

It has appointed HSBC and MUFG as green structuring advisors with First Abu Dhabi Bank, J.P. Morgan and Standard Chartered Bank among the joint lead managers, according a statement to the Tadawul.

A flurry of debt sales in recent weeks across the Gulf markets have drawn great interest from international investors attracted by the strong ratings of many regional issuers. Bahrain, Abu Dhabi and Dubai are among the sovereign sales that have already been announced while several corporations have also gone to the market as a low oil price and the coronavirus pandemic spur activity.

Saudi Electricity said it had identified a portfolio of eligible projects which are qualified under its Green Sukuk and which are linked to delivering various environmental and social benefits.

These include a smart metering project and renewable energy integration, the company said.

The utility expects them to contribute positively to the country’s commitment to the United Nations Framework Convention on Climate Change, as well as its own sustainable development objectives contained in Saudi Vision 2030.

This calls for reasonably priced clean energy, renewable energy integration into the grid of up to 27.6 gigawatts by 2025, and 10 million smart meters. The company expects to invest as much as SR9.56 billion in these projects.