The Saudi Finance Minister, Muhammad Al-Jadaan, said that the kingdom has appointed financial advisors to issue green debt instruments, but it has not yet determined the form of the issuance.
He added to Reuters that the Saudi economy is recovering well from the Covid-19 pandemic, and that he expects non-oil GDP to grow by between 4.7% and 5% this year, and that GDP growth in general will be 2.8%.
He said that there are no plans yet to amend the value-added tax, after increasing it last year to 10%, to mitigate the impact of the decline in oil revenues on state finances.
Speaking from Rome, where he attended the G20 summit, Al-Jadaan said that the kingdom, the world’s largest oil exporter, is working towards achieving a sustainable economy through sustainable energy revenues and resources.
“The government has many green projects. We have a lot of solar and wind power plants that need financing, and we have many new plans in the pipeline,” he added.
He pointed out that Saudi Arabia has appointed financial advisors, but has not yet decided on details such as whether the financing will be in the form of a joint loan, bonds or sukuk, and whether it will be issued on a local or international scale.
“We are working on determining that and we will announce it very soon,” he said.
Ahead of United Nations climate talks that began on Sunday in Glasgow, Scotland, Saudi Arabia said last month it aimed to reach zero emissions of greenhouse gases by 2060.
“We are very serious about climate change… (but) we need to make sure that we are also realistic about the transition process,” Jadaan said.
Saudi Arabia repeatedly stresses the existing and continuing importance of fossil fuels to the security of global energy supplies.
Vision 2030, launched by Crown Prince Mohammed bin Salman, aims to gradually reduce the economy’s heavy dependence on oil exports by establishing new sectors and stimulating the private sector.
As part of efforts to diversify the country’s economy, the crown prince announced in March a program called “Partner” under which the local private sector will invest five trillion riyals ($1.3 trillion) by 2030.
The Minister of Finance said that this is a medium to long-term program, but to date it has achieved between 470 and 500 billion riyals of investments from listed private and public companies.
The Public Investment Fund, the sovereign wealth fund and the engine of the Kingdom’s endeavors for economic transformation, also plans to pump about 150 billion riyals into the national economy annually until 2025.
Al-Jadaan said that the fund has “abundant liquidity” and that “no additional transfers are currently being considered” after $40 billion of foreign reserves were transferred to the central bank last year to help the Public Investment Fund finance its investments.
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