Saudi Arabia Raises €2.25 Billion in Euro-Denominated Bond Sale, Including First Green Tranche

Saudi Arabia has successfully raised €2.25 billion ($2.36 billion) through a euro-denominated bond sale, marking a significant step in its sustainable financing strategy. The issuance, conducted under the Kingdom’s Global Medium-Term Note Issuance Program, includes its first-ever green bond tranche, reinforcing its commitment to sustainability and economic diversification under Vision 2030.

The National Debt Management Center (NDMC) announced that the offering was split into two tranches and saw strong investor demand, attracting orders of around €10 billion—four times the issuance size. The green tranche, valued at €1.5 billion, carries a seven-year maturity, while the second tranche, worth €750 million, will mature in 12 years.

“This issuance highlights the Kingdom’s efforts to investors and market participants, representing a significant step toward realizing the objectives of Saudi Vision 2030,” NDMC stated.

Commitment to Sustainable Finance

The introduction of a green euro bond aligns with Saudi Arabia’s broader sustainability strategy, particularly under the Financial Sector Development Program. The Kingdom has set ambitious goals to achieve net-zero emissions and transition toward a more sustainable economy.

Earlier this month, NDMC’s Chief of Portfolio Management, Muhannad Mufti, hinted at further expansion in sustainable financing, stating at the Capital Markets Forum that Saudi Arabia is considering issuing green bonds in international markets in 2025.

Growing Debt Market and Investor Interest

Saudi Arabia’s debt market has been expanding significantly, attracting strong investor interest despite global economic challenges and rising interest rates. A report by Kamco Invest projected that the Kingdom will account for the largest share of bond and sukuk maturities in the Gulf Cooperation Council (GCC) region, with an estimated $168 billion maturing between 2025 and 2029. Of this, government-issued bonds and sukuk are expected to total $110.2 billion.

Meanwhile, data from Fitch Ratings revealed that the GCC’s debt capital market surpassed the $1 trillion outstanding mark by the end of November 2024, underscoring the region’s growing prominence in global debt markets.

Ongoing Sukuk Issuances

In addition to its euro-denominated bonds, Saudi Arabia has been actively issuing riyal-denominated sukuk. NDMC recently completed its February issuance, raising SR3.07 billion ($818 million). This follows previous sukuk issuances of SR3.72 billion in January, SR11.59 billion in December, and SR3.41 billion in November.

With its latest bond sale, particularly the inclusion of its first green tranche, Saudi Arabia continues to strengthen its position in the global financial market while advancing its sustainability agenda.