Saudi Public Investment Fund begins selling green sukuk and bonds

Saudi Public Investment Fund is one of the largest sovereign wealth bodies in the world. File
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Updated 03 September 2024
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Saudi Public Investment Fund begins selling green sukuk and bonds

RIYADH: Saudi Arabia’s sovereign wealth fund is preparing to issue a benchmark-sized three-year sukuk and a green bond maturing in 2032, Reuters reported, citing bank documents. 

The report said that three-year sukuk is priced between 80 and 85 basis points above the US Treasury bonds, while the green note stands at 135 bps. 

Benchmark size typically refers to at least $500 million.

The proceeds from the sukuk sale will be directed toward the general purposes of the fund, while the green bond sale will be used for eligible projects, the release added. 

Goldman Sachs, HSBC Holdings and JPMorgan Chase & Co. are among the bookrunners. 

This will mark the fourth time the Public Investment Fund has tapped the bond market to support its major investment plans, including the development of giga-projects in the Kingdom. 

In 2023, PIF raised $7 billion through two dollar bond sales and an additional $850 million from a sterling-denominated issue.

In August, the fund also obtained a $15 billion revolving credit facility for general corporate purposes from a diverse global syndicate of 23 financial institutions from Europe, the US, the Middle East, and Asia. 

In a statement, PIF said that this credit facility is offered for an initial period of three years, and is extendable for up to two additional years. 

The fund added that this credit facility will replace the previous revolving arrangement agreed on in 2021. 

Loans and debt instruments represent one of PIF’s four sources of funding.  The other three are capital injections from governments, state assets transferred to PIF, and retained earnings from investments. 

The fund is currently spearheading the economic diversification efforts of Saudi Arabia, as the Kingdom is steadily reducing its decades-long dependence on oil. 

Since 2017, PIF has established 95 companies and injected at least SR150 billion ($39.97 billion) into the local economy annually. 

In July, a report released by KPMG noted that the total revenue of PIF climbed by more than 100 percent year-on-year in 2023 to reach SR331 billion. 

The financial results also affirmed PIF’s robust position, earning an A1 rating from Moody’s with a positive outlook and an A+ standing from Fitch with a stable outlook.  


As world fractures, experts weigh in on the politics of AI at WGS

Updated 26 sec ago
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As world fractures, experts weigh in on the politics of AI at WGS

  • e& group CEO Hatem Dowidar said there was increasing pressure to choose between the Chinese and US ecosystems

DUBAI: Across three days of rigorous debate at the World Government Summit in Dubai, experts from some of the world’s largest tech and telecommunication companies debated what the future political landscape of artificial intelligence development would be.

Speaking at the summit on Thursday, e& group CEO Hatem Dowidar said there was increasing pressure to choose between the Chinese and US ecosystems, which could have impacts on the sovereign capabilities of countries, like Gulf Cooperation Council member states, which thus far have stayed in the middle.

“I think the fracture and the pressure today is if you use this technology, you cannot use the other. You must separate them completely and this is something that never happened before,” Dowidar said.

He warned that whilst people around the world currently have access to both the leading large language models in the US and China, ChatGPT and Deepseek, this would not always be the case, and middle powers would need to develop their own capability to maintain their sovereignty.

“Europe is trying to find its own way as well, because Europe — having been caught now in the middle — they don’t have platforms, they don’t have the data center capability,” he said.

“So now, Europe is focusing a lot on building sovereign capability, sovereign data centers to run AI applications within Europe.”

Dowidar said the GCC had been ahead of the curve in this regard, having worked out early on that sovereign capability would be necessary in the new multipolar world and subsequently investing heavily in local infrastructure and capability.

“We were lucky here in the region that already — I would say a couple of years ago —we have kind of ironed out how this works,” he said.

“I think that everyone will try to see how they can either utilize the global platforms in a sovereign manner, or they end up trying to push to develop their own platforms.” 

This sentiment was echoed by Chamath Palihapitiya, the founder and managing partner of Social Capital, who said that China’s dedication to open-source models — whose code is released under a license granting users rights to view, study, modify, and redistribute it freely — could make Chinese AI more popular in the long run for nations looking to keep some level of sovereignty.

“I do think that there are a handful of American open-source models that are quite good. I think Nvidia’s models are excellent. But in fairness, the Chinese open-source models are just superb,” he told the summit on Wednesday.

“It’s going to be important for every country to make their own decisions about their own sovereignty, and in that realm, I think the open-source models provide the clearest path, because it just gives you total transparency to what’s happening underneath the hood.”

This was reiterated by Joseph Tsai, the chairman and co-founder of Alibaba Group, who said Chinese open-source systems would be favored by middle powers — but warned they had yet to find a way to be economically self-sufficient. 

“Because countries care about the sovereignty aspect and care about their data privacy, you can take an open-source model and deploy it on your own infrastructure … giving you ownership and control” he said.

“But it remains to be seen how economically all the model companies are going to make it sort of sustainable with an open-source approach … This is the biggest challenge for the Chinese firms.”