Saudi Arabia’s PIF hires banks to advise on ESG -IFR

Governor of the Saudi Public Investment Fund Yasir Othman Al-Rumayyan, Saudi Finance Minister Mohammed Abdullah Al Jadaan, Tourism Minister Ahmed Aqeel Al Khateeb and others pose for photo during meeting to Launch Public Investment Fund Strategy 2021-2025, in Riyadh, Saudi Arabia, January 24, 2021. Saudi Press Agency/Handout via REUTERS.

DUBAI, Sept 8 (Reuters) – Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has hired five international banks as members of an environmental, governance and social (ESG) panel for its medium-term capital-raising strategy, IFR News reported on Monday.

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

The hydrocarbon-rich Gulf has seen a surge of interest in ESG-related initiatives and deals amid growing awareness among global investors about ESG risks.

Credit Agricole (CAGR.PA), Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), HSBC (HSBA.L) and Standard Chartered (STAN.L) were hired to advise the investment fund’s global capital finance division on an ESG framework for public market capital raisings, IFR, a fixed income news service owned by Refinitiv, reported.

IFR also said that Saudi Arabia’s finance ministry hired HSBC and JPMorgan (JPM.N) as structuring agents for the kingdom’s sustainability financing framework.

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

He said the recently announced “Green Saudi Initiative and Green Middle East Initiative” demonstrate a roadmap to environmental preservation, adding further details would be announced later.

The establishment of PIF’s framework could lead to a debut multi-billion dollar bond sale before the end of 2021, banking sources have previously told Reuters.

PIF did not respond to an emailed request for comment. The banks also did not respond to requests or declined to comment.

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

Neighbouring Oman is also in the early stages of working on an ESG framework, sources told Reuters. read more

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

Reporting by Yousef Saba; editing by Jason Neely

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