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Saudi Arabia offers green bonds in push toward net zero

While the move signals that the kingdom understands the global trends toward "green," its impact on climate action will require further steps.
Saudi Miniser of Energy Prince Abdulaziz bin Salman Al Saud addresses delegates during the 2021 climate summit, Glasgow, Ireland, Nov. 10, 2021.

Last month, Saudi Arabia’s Public Investment Fund (PIF) issued green bonds — a financial instrument used to raise funds for environmentally friendly projects — for the first time. Entering debt capital markets for the first time, PIF raised $3 billion, which will contribute to the overall sum of $10 billion that the fund aims to invest in green projects by 2026. PIF has been tasked with helping the Saudi economy diversify away from oil.

Saudi Arabia has committed to a number of ambitious climate goals. The country aims to reduce carbon emissions by 278 million tons a year by 2030, as well as increase its renewable energy generation capacity by 50%. The country’s leading oil powerhouse — Saudi Aramco — has also committed to net zero operational emissions by 2050, with the country itself aiming for net zero by 2060. PIF aims to finance this transition through green bonds.

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