RIYADH: As Saudi Arabia advances its Vision 2030 diversification agenda, green finance is emerging as an increasingly important mechanism for funding the country’s ambitious sustainability projects while supporting long-term economic growth.
From renewable energy and green hydrogen to sustainable infrastructure and clean transportation, green finance is helping channel capital into projects aimed at reshaping the Kingdom’s economy and environmental footprint.
While often operating behind the scenes of high-profile ventures, green finance is becoming a core component of the transformation underway.
A 2025 study published in the Journal of Environmental Management and Tourism, titled “Green Financing for Sustainable Development in Saudi Arabia” by Ahmad Al-Harbi, identified green finance as a crucial component of sustainable development in the Kingdom.
It argued that green financing directly supports Vision 2030 by creating investment channels for renewable energy, sustainable infrastructure and environmentally focused projects.
The study states: “Green financing is critical for Saudi Arabia’s transition toward sustainable development, particularly in the context of the Vision 2030 agenda.”
It also outlined the types of projects typically supported by green finance, noting: “Projects funded through green financing typically focus on renewable energy, energy efficiency, and sustainable land use practices. For example, the implementation of solar energy projects not only contributes to energy diversification but also significantly reduces greenhouse gas emissions.”
FASTFACT
Did You Know?
- Green finance is increasingly supporting Saudi Arabia’s economic diversification and decarbonization goals.
- Al Rajhi Bank’s sustainable finance portfolio reached $8.9 billion by the end of 2025.
- Green finance is helping fund Saudi Arabia’s renewable energy, clean transport, water and energy-efficiency projects.
Economist and financial analyst Talat Zaki Hafiz told Arab News that green finance has become an important source of capital for the Kingdom’s economic and environmental transformation.
“Since the launch of Saudi Vision 2030 in 2016, the Kingdom has accelerated its transition toward a more diversified and sustainable economy by investing in renewable energy, green hydrogen, and other low-carbon technologies. This transformation is being underpinned by the rapid development of green finance, which is playing a pivotal role in mobilizing the capital needed to support decarbonization, reduce reliance on hydrocarbons, and drive sustainable economic growth.”
The significance of green finance lies in its ability to serve two objectives simultaneously: economic diversification and environmental sustainability. In this sense, it has become an important financing pillar supporting Vision 2030 as major projects attract investment and advance clean energy, decarbonization and other sustainability goals.
The banking sector is playing an increasingly prominent role in this shift. Hussein Talal Bayari, general manager of corporate banking at Al Rajhi Bank, told Arab News that demand for sustainable financing is expanding alongside the Kingdom’s major development projects.
“Today, we are witnessing sustainable finance in the Kingdom transition from the stage of initiatives to the stage of implementation on a wide scale, driven by the scale of projects linked to Saudi Vision 2030. Based on our experience, demand is primarily concentrated in renewable energy projects, water infrastructure, clean transportation, in addition to projects related to energy efficiency.”
Al Rajhi Bank illustrates the growth of sustainable financing in the Kingdom. Bayari said the bank’s eligible environmental assets had reached around SR1.8 billion ($482 million), spanning renewable energy, clean transportation, water projects and energy efficiency.
He also highlighted the measurable environmental impact of the bank’s financing activities.
“The banking sector has undergone a fundamental transformation in recent years. Previously, the focus was on providing financing, whereas today financial institutions have become a key partner in directing investments toward sectors that achieve sustainable economic, social, and environmental impact.
“At Al Rajhi Bank, the sustainable finance portfolio increased to $8.9 billion, equivalent to more than SR33.3 billion by the end of 2025. Projects financed within this portfolio have also contributed to avoiding more than 217,000 tonnes of carbon emissions annually. This reflects the shift from the concept of traditional financing to the concept of responsible financing that balances growth with long-term impact.”
Hafiz said the long-term success of the Kingdom’s green finance strategy would ultimately depend on its ability to make sustainable financing a mainstream source of capital.
“If, over the next five to 10 years, green finance becomes a mainstream source of capital that drives investment, innovation, industrial diversification, and sustainable economic growth, then Saudi Arabia's green finance strategy can be regarded as a clear success,” he said.
As the Kingdom’s transformation progresses, the effects of green financing are expected to become increasingly visible across the economy — from environmental gains and job creation to industrial diversification and new investment opportunities.
The financial mechanisms behind the Kingdom’s sustainability drive may rarely command the same attention as the projects they support. Yet green finance is increasingly becoming one of the quiet forces helping turn Saudi Arabia’s ambitions in clean energy, industrial decarbonization and other sustainable sectors into reality.
