Saudi wealth fund PIF hires banks to advise on ESG for capital-raising strategy

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.

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, Deutsche Bank, Goldman Sachs, HSBC and Standard Chartered 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 as structuring agents for the kingdom’s sustainability financing framework.

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 and the finance ministry did not immediately respond to emailed requests for comment. The banks also did not immediately 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.

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

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.

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