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The Public Investment Fund successfully completed its international green bond issuance amounting to $5.5 billion in February 2023.

This follows the PIF’s inaugural green bond issuance amounting to $3 billion in October 2022.

Green bonds are a financing instrument specifically earmarked to raise money for climate and environmental projects that comply with the ESG requirements.

It is worth noting that the PIF’s first bond issuance has included the first-ever green bond amounting to $500 million issued by a sovereign wealth fund for a maturity period of 100 years. Moreover, the first issuance was oversubscribed by more than eight times, with a subscription request reaching $25.9 billion.

The latest bond issuance was oversubscribed by more than six times, with books exceeding $33 billion, and it was issued in three tranches comprised of $1.75 billion (seven years), $2 billion (12 years) and $1.75 billion (30 years).

I believe that the two consecutive successful issuances of international green bonds by PIF, in total value of $8.5 billion, reflect PIF’s solid financial position and strong international credit trust. This is proven since the bonds were sold to a wide range of institutional investors globally, including Asia.

The PIF was established in 1971 to initially fund companies of foundational importance to the Saudi economy.

I believe that the two consecutive successful issuances of international green bonds by PIF, in total value of $8.5 billion, reflect PIF’s solid financial position and strong international credit trust.

In 2015, the PIF went through organizational and operational restructuring, placing the fund under the direction of the newly formed Council of Economic and Development Affairs, with Crown Prince Mohammed bin Salman as chairman. This major restructuring step gave the PIF greater autonomy and better-defined national strategic responsibilities.

This restructuring enabled the PIF to improve both its financial performance and investment portfolio (assets under management), including yield on investment. Since then, the PIF has accelerated and positioned itself as a key driver for Kingdom’s Vision 2030, achieving positive, sustainable economic and social change.

It is worth noting that PIF assets under management have grown from $152 billion in 2015 to $620 billion in the first quarter of 2021 and was able to create 71 companies in 13 strategic economic sectors. Also, it was able to create more than 500,000 direct and indirect jobs for Saudi nationals.

I believe the PIF is not only playing a pivotal role in realizing the Kingdom’s Vision 2030, but also is driving the economic transformation in ºÚÁÏÉçÇø and as one of the largest and most impactful investment funds in the world.

In addition, the PIF’s first and second green bond issuance reflects its serious role and efforts in supporting ºÚÁÏÉçÇø’s green agenda and initiatives, such as Saudi Green Initiative and to reach net zero carbon by 2060.

Last, but not least, overwhelming international interest in the PIF’s green bonds is sending a strong message to the financial institutions and financing houses around the world regarding its solid credit profile and strong financial position, especially when considering that the PIF’s green finance framework was created in line with best market practice. It is also fully in compliant with the International Capital Market Association’s Green Bond Principles 2021 and the Loan Market Association’s Green Loan Principles 2021.

• Talat Zaki Hafiz is an economist and financial analyst. Twitter: @TalatHafiz

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