Saudi Arabian Sovereign Wealth Fund PIF Raises $3 Billion with Debut Green Bonds

Posted on 10/06/2022

Green bonds continue to grow with popularity among government and government-linked issuers. Saudi Arabia’s Public Investment Fund (PIF) raised US$ 3 billion in its first foray into the debt capital markets. PIF is the first sovereign wealth fund to issue green bonds and sold them in three tranches, including a world-first U.S. dollar century green bond. PIF issued US$ 500 million from the 100-year notes. PIF green investments include eligible green projects in renewable energy, energy efficiency, sustainable water management, pollution prevention and control, green buildings and clean transportation. This green bond issuance follows the publication of PIF’s Green Finance Framework in February 2022.

The bond was more than 8 times oversubscribed, with orders exceeding $24 billion. It was issued in 3 tranches, comprising:

US$ 1.25 billion (SR4.69 billion), 5 year, 5% coupon
US$ 1.25 billion (SR4.69 billion), 10 year, 5.25% coupon
US$ 500 million (SR1.88 billion), 100 year, 5.375% coupon

Saudi Arabia is one of the world’s largest oil exporters. Saudi Arabia has pledged to neutralize greenhouse gas emissions within its borders by 2060. Saudi Arabia seeks to increase the mix of solar and wind energy in its local grid to 50% by 2030, with natural gas set to make up the rest. The debt offering comes just as OPEC+ agreed to make a large production cut to keep oil prices high.

On August 4, 2022, the Monetary Authority of Singapore (MAS) announced that Singapore’s S$2.4 billion inaugural sovereign green bond was priced at 3.04%. The Aug-2072 bond is the first 50-year bond issued by the Singapore Government.

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