Saudi Arabia’s Wealth Fund Appoints Banks for Debut Green Bonds

DUBAI – According to a document released on Tuesday, the Public Investment Fund (PIF), the Saudi Arabian sovereign wealth fund, has recruited banks like Citi and JPMorgan to organize a debut issue of multi-tranche U.S. dollar-denominated green bonds.

Earlier this month, sources had told Reuters that PIF will finally issue the long-awaited green bonds either this month or in October.

On Tuesday, the joint global coordinators and active book-runners BNP Paribas, Citi, Deutsche Banks, Goldman Sachs, and JPMorgan will begin organizing investor calls.

Based on market circumstances, we plan to issue our first batch of bonds in increments of 5, 10, and maybe even longer. PIF will back the issue, and it will be made through GACI First Investment Company.

Reuters has seen an investor presentation stating that the PIF manages assets worth $608 billion. This figure does not include the 4% share in Aramco. Also, the funds were transferred in February.

The report said, “PIF is functioning as the essential vehicle to realize KSA’s green objectives. It alludes to a comprehensive plan to wean the country off oil.

Analysis of Report

According to the report, the fund plans to spend more than $10 billion by 2026 on renewable energy. It also includes clean transportation and water sustainability projects, among others that qualify for funding. The fund plans to increase its assets under management to more than $1 trillion by 2025.

For the construction of NEOM, these $4.45 billion are set. It is a pre-planned metropolis of the future located in the Mojave Desert. According to Saudi Crown Prince Mohammed bin Salman, the first phase of the project would cost 1.2 trillion riyals ($318.98 billion). Also, the company will go public in 2024.

As of the end of June, PIF had $21 billion in gross debt and $45 billion in cash and equivalents. The report also revealed that the company has $86 billion in Treasury assets. Moreover, the $5 billion in unused revolving credit after withdrawing $10 billion in June.

Green Bond bookrunners also include Credit Agricole, First Abu Dhabi Bank, HSBC, Mizuho, SMBC Nikko, SNB Capital, Societe Generale, and Standard Chartered.