The Public Investment Fund (PIF) of Saudi Arabia has engaged leading international banks to manage the sale of its inaugural euro-denominated green bond, according to sources and documents reviewed by Reuters.
The move marks another step in the kingdom’s strategy to tap into international bond markets to finance its ambitious development projects while aligning with its environmental goals. The sovereign wealth fund, along with other state-affiliated entities, is increasingly turning to dollar and euro bond markets to bridge funding gaps and support multibillion-dollar projects.
PIF, which oversees assets worth nearly $1 trillion, has appointed Crédit Agricole CIB, JP Morgan, and Societe Generale to organize investor calls beginning this week. The fund is targeting net-zero carbon emissions by 2060 as part of its broader sustainability agenda.
The fund’s foray into green debt began in 2022, with several U.S. dollar-denominated bond issuances under its Green Finance Framework. This framework allows proceeds to be allocated toward renewable energy projects, clean transportation initiatives, and sustainable infrastructure, including projects by PIF subsidiaries aligned with Saudi Arabia’s Vision 2030 program.
The 2060 net-zero target was announced by Crown Prince Mohammed bin Salman in 2021, reflecting the kingdom’s commitment to sustainable financing and green investment. This potential bond sale follows recent interest rate cuts by Saudi Arabia and other Gulf countries, mirroring the U.S. Federal Reserve’s policy adjustments.
According to Fitch Ratings, Saudi issuers accounted for 18.9% of the $250 bn in emerging-market dollar debt issued in the first half of this year. The government recently raised $5.5 billion through a sukuk sale in September, while PIF successfully sold a $2 billion 10-year bond that received strong investor demand.
PIF’s flagship project, NEOM, aims to operate entirely on renewable energy. The development includes the Oxagon and The Line projects, both emphasizing green design principles, zero-carbon mobility solutions, and the preservation of natural habitats.
The bond issuance aligns with Saudi Arabia’s broader strategy to diversify its economy and reduce dependence on oil revenues while promoting sustainable development initiatives.
