Saudi Arabia’s PIF hires banks to advise on ESG fundraising


King Abdullah’s financial district, north of Riyadh. Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has recruited five international banks as members of an environmental, governance and social (ESG) panel for its medium-term capital raising strategy.
Image credit: Reuters

Dubai: Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has recruited five international banks as members of an environmental, governance and social (ESG) panel for its strategy of raising capital at medium term, IFR News reported on Monday.

Sources told Reuters in July that the PIF sent banks a request for proposals to help it set up an ESG framework that would allow it to broaden its funding base by attracting ESG-focused investors.

The Gulf, rich in hydrocarbons, has seen a resurgence of interest in ESG-related initiatives and agreements in a context of growing awareness among global investors of ESG risks.

Credit Agricole, Deutsche Bank, Goldman Sachs, HSBC and Standard Chartered have been hired to advise the global capital finance division of the investment fund on an ESG framework for raising capital in public markets, reported IFR, a service information on fixed income securities owned by Refinitiv.

The IFR also said that Saudi Arabia’s finance ministry had engaged HSBC and JPMorgan as structuring agents for the kingdom’s sustainable development finance framework.

“The structuring of Saudi Arabia’s sustainability finance framework is a strategic step in line with the Kingdom’s 2030 orientation (Vision) towards sustainability and ESG engagement,” said Finance Minister Mohammed al-Jadaan in a written statement to Reuters.

He said the recently announced “Saudi Green Initiative and the Middle East Green Initiative” demonstrated a roadmap for preserving the environment, adding that more details would be announced later.

The establishment of the PIF framework could lead to a first sale of multibillion-dollar bonds before the end of 2021, banking sources previously told Reuters.

PIF did not respond to an email request for comment. Banks either did not respond to requests or declined to comment.

PIF signed a $ 15 billion loan with a large group of banks in March, which follows a $ 10 billion loan taken in 2019 that was repaid last year and an $ 11 billion facility. in 2018.

Neighboring Oman is also in the early stages of work on an ESG framework, sources told Reuters.

The Red Sea Development Company, owned by PIF, secured a $ 3.8 billion “green” loan earlier this year for new hotels powered by renewable energy.

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