RIYADH: Saudi Arabia’s Public Investment Fund has raised $5.5 billion through its second green bond issuance, it has announced.
The sovereign wealth fund will use the money to finance its sustainable investments, in accordance with its Green Finance Framework.
The issuance follows PIF’s inaugural green bond in October 2022, the first-ever such financial instrument issued by a sovereign wealth fund and the first-ever 100 year green bond.
Fahad AlSaif, head of Global Capital Finance Division at the fund, said: “PIF’s second green bond issuance underlines the role that PIF is playing in supporting Saudi Arabia’s green agenda, as well as diversifying the local economy and unlocking new and sustainable sectors.
“Strong demand from international institutional investors for this second issuance is a testament to the ongoing success of PIF’s capital raising strategy, its credit profile and financial strength.”
This latest bond issuance was more than six times oversubscribed, with books exceeding $33 billion. It was issued in three tranches, comprising $1.75 billion for seven years; $2 billion for 12 years; and $1.75 billion for 30 years.
The bond was sold to a wide range of institutional investors globally, including Asia.
The issuance reflects PIF’s role as the driver of economic transformation in Saudi Arabia and as one of the largest and most impactful investment funds in the world, in addition to demonstrating PIF’s commitment to its Green Finance Framework.
As with its inaugural bond issuance, PIF will allocate an amount equal to the net proceeds of the issuance to fund eligible green projects in accordance with its Green Finance Framework, which include projects in the space of renewable energy, energy efficiency, sustainable water management, pollution prevention and control, green buildings and clean transportation.
The PIF plans to invest more than $10 billion by 2026 in qualified green projects, and the Saudi Green Initiative as a whole is aiming to plant 50 billion trees and restore an area equivalent to 200 million hectares of degraded land, which will in turn reduce global carbon levels by 2.5 percent.