Saudi Arabia's sovereign wealth fund invests $5.2 billion in green bonds as part of its diversification efforts.

• In 2022 and 2023, the PIF became the first sovereign wealth fund to issue $8.5 billion in green bonds.
• As of June 2024, $5.2 billion has been allocated to projects, compared to $1.3 billion in June of the previous year.
• The sustainability of megaprojects like Neom, which are central to the kingdom's ambitions, is frequently questioned by critics.

As of June 2024, Saudi Arabia's Public Investment Fund (PIF) has spent $5.2 billion out of the $8.5 billion it raised through green bonds on projects, according to its Allocation and Impact Report released on Friday.

This allocation amount has increased from $1.3 billion in the previous June.

In October 2022, the PIF became the first sovereign wealth fund to issue a green bond, which was followed by a second green bond offering in February 2023.

The sovereign wealth fund, which manages $925 billion in assets, must spend $19.4 billion on green projects, as stated in its annual report.

The PIF has allocated funds for the development of eligible green projects, which contribute to the United Nations Sustainable Development Goals, with major expenditure in Renewable Energy, Green Buildings, and Sustainable Water Management projects.

Saudi Arabia aims to achieve net-zero greenhouse gas emissions by 2060 and has invested billions of dollars in sustainable development projects as part of Crown Prince Mohammed bin Salman's Vision 2030 plan to diversify and modernize the kingdom's economy, decreasing its dependence on oil.

The kingdom's Vision 2030 goals, which include ambitious plans for urban development like Neom, are met with criticism from those who question the sustainability of such large-scale projects due to the heavy industry required for construction and building materials. Despite the fact that the majority of the Saudi economy still depends on oil production.

According to Philip Oldfield, head of the built environment school at the University of New South Wales, the carbon cost of construction for Neom will outweigh any environmental benefits, with an estimated 1.8 billion tons of embodied carbon dioxide produced by the project.

The report of the PIF's Allocation and Impact highlights case studies to support its sustainability promises. It outlines a water sustainability project for Neom that aims to create a "fully-circular system" to achieve "100% wastewater recapture and energy-neutral recycling."

The PIF emphasized its commitment to green hydrogen, which is viewed as a crucial element in the energy transition. Neom Green Hydrogen, a joint venture between Neom and Saudi firms ACWA Power and Air Products, will be the world's largest green hydrogen plant and will run entirely on renewable energy, as stated in the report.

The report mentions several case studies that have received either partial or full investment and financing from the PIF, but all of which are still in progress.