PIF announces successful completion of $3bn inaugural green bond
The Public Investment Fund (PIF) on Thursday completed its first-ever bond issuance — the century green bond — raising $3 billion to finance or refinance PIF’s green investments, in accordance with its Green Finance Framework.
PIF green investments include eligible green projects in renewable energy, energy efficiency, sustainable water management, pollution prevention and control, green buildings and clean transportation.
The bond was more than 8 times oversubscribed, with orders exceeding $24 billion. It was issued in 3 tranches, comprising:
– $1.25 billion (SR4.69 billion), 5 year, 5% coupon
– $1.25 billion (SR4.69 billion), 10 year, 5.25% coupon
– $500 million (SR1.88 billion), 100 year, 5.375% coupon
The strong demand by international investors for PIF’s first issuance reflects confidence in 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, which 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 issuance is a continuation of PIF initiatives to support Saudi Arabia’s green agenda and follows previous announcements by PIF such as the launch of the MENA Voluntary Carbon Market and the various renewable projects PIF is spearheading as part of its commitment to developing 70% of Saudi Arabia’s renewable energy capacity outlined by Saudi Vision 2030.
Head of PIF’s Global Capital Finance Division Fahad AlSaif 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. 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.”
The bond was more than 8 times oversubscribed, with orders exceeding $24 billion. It was issued in 3 tranches, comprising:
– $1.25 billion (SR4.69 billion), 5 year, 5% coupon
– $1.25 billion (SR4.69 billion), 10 year, 5.25% coupon
– $500 million (SR1.88 billion), 100 year, 5.375% coupon
The strong demand by international investors for PIF’s first issuance reflects confidence in 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, which 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 issuance is a continuation of PIF initiatives to support Saudi Arabia’s green agenda and follows previous announcements by PIF such as the launch of the MENA Voluntary Carbon Market and the various renewable projects PIF is spearheading as part of its commitment to developing 70% of Saudi Arabia’s renewable energy capacity outlined by Saudi Vision 2030.
Head of PIF’s Global Capital Finance Division Fahad AlSaif 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. 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.”