Riyadh city skyline
Saudi Arabia's financing framework opens way to green bond sales. Image Credit: Shutterstock

Riyadh: Saudi Arabia's government may start selling green bonds for the first time as the world's biggest oil exporter seeks to raise money for environmentally-friendly projects and a transition away from fossil fuels that are the backbone of its economy.

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The Ministry of Finance on Thursday unveiled a green financing framework that identifies eight types of projects eligible for funding from so-called "green" debt sales, ranging from support for cleaner transportation and renewable energy to projects that may help the desert kingdom adapt to climate change.

The ministry said the structure will allow the government to sell green bonds and sukuk for projects that meet the criteria. Any sale of such debt would be a first for the central government as it aims to cut its greenhouse gas emissions by 278 million tons per year by 2030 and have net zero emissions by 2060.

Saudi Arabia's sovereign wealth fund, known as PIF, started issuing green debt in 2022. 

Issuances for the government will be done through the Ministry of Finance. Two committees, the Sustainable Financing Committee and the Projects and Monitoring Committee, will be responsible for oversight of sales and allocation of funding to projects.