Saudi Arabia Woos ESG Skeptics With Massive Green Bond Offering - Bloomberg
With the biggest member of the world’s No. 1 oil cartel readying its first-ever green bond, sustainable investors are debating what to make of it.
Saudi Arabia’s plan to enter the market for green bonds marks a watershed moment. Some investors say it represents an encouraging step for the oil-addicted Gulf state to plot a path away from fossil fuels. Others are asking for credible evidence the debt will genuinely be green. The upshot, though, is that the biggest oil exporter on the planet is likely to find plenty of buyers for a bond it says will be climate friendly.
Both the Saudi government itself and the kingdom’s sovereign wealth fund are preparing to sell green bonds in the coming months. The deals may raise billions of dollars each and will help the Public Investment Fund finance projects like a so-called sustainable tourism resort on the Red Sea that will be powered entirely by renewable energy, according to people familiar with the plans.
According to Todd Schubert, head of fixed-income research at Bank of Singapore Ltd., it almost makes no difference who an issuer is, given the near insatiable appetite for green assets. “The demand for green and other ESG bonds is so voracious that I would expect Saudi Arabia to have little trouble consummating this deal,” he said.
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