PIF completes first green bond offering, raises $3 bln

Logo of Public Investment Fund (PIF)

The Public Investment Fund (PIF) completed today, Oct. 6, its first green bond issuance, raising $3 billion (SAR 11.25 billion) to finance or refinance the sovereign fund’s green investments, in accordance with the Green Finance Framework.

The fund said in a statement, it issued the 100-year bonds, which reflect the high confidence in its financial position.

The issuance was more than eight times oversubscribed, with orders exceeding $24 billion (SAR 90 billion).

It was issued in three tranches, comprising $1.25billion (SAR 4.69 billion), 5 year, 5% coupon; $1.25billion (SAR 4.69 billion), 10 year, 5.250% coupon; and, $500million (SAR1.88 billion), 100 year, 5.375% coupon.

The strong demand by international investors for PIF’s first issuance reflects confidence in the 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.

This green bond issuance follows the publication of PIF’s Green Finance Framework in February 2022. The Green Finance Framework was created in line with best market practice and is fully compliant with the International Capital Market Association’s Green Bond Principles 2021 and the Loan Market Association’s Green Loan Principles 2021.

The proceeds will be used to finance eligible green projects, including renewable energy, sustainable Fahad AlSaif, Head of PIF’s Global Capital Finance Division, 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.”

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, AlSaif said.

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, he added.