The sukuk issuance, backed by Saudi Electricity Company (SEC), was part of a larger push towards sustainable financial products and long-term investments. The 10-year green tranche, issued at an interest rate of 4.632%, is part of SEC's move towards environmentally sustainable projects, aligning with global trends that focus on green financing. The 30-year tranche, priced at 5.684%, complements the green offering, focusing on more traditional financial avenues. Both tranches were launched under SEC’s international sukuk program, reflecting the company’s growing international presence in global bond markets.
This issuance highlights Saudi Arabia’s broader ambitions under its Vision 2030 program, which seeks to diversify the economy away from oil dependence by embracing various industries, including finance and green energy. By tapping into international Islamic finance markets, the kingdom is expanding its influence while providing lucrative investment opportunities for both domestic and foreign investors. The sukuk also positions Saudi Arabia as a leader in the global sukuk market, continuing its dominance in Islamic finance products.
Saudi Arabia has used sukuk bonds in recent years to raise capital for infrastructure projects, development, and sustainable energy. As global demand for Islamic finance continues to rise, Saudi's issuance demonstrates its strategic approach to growing its financial sector while meeting the increasing investor appetite for environmentally responsible financial products. The success of this issuance underscores the kingdom’s ability to attract significant investment even in a volatile global economic environment.
The dual-tranche sukuk sale is expected to support Saudi Electricity Company's ongoing expansion plans, particularly in green energy and infrastructure projects, in line with Saudi Arabia's push to meet its energy transition goals. These projects will play a key role in helping the kingdom reduce its carbon emissions, while at the same time supporting economic growth. Saudi's focus on green sukuk reflects a broader trend across the Middle East, where countries are increasingly using Islamic financial instruments to fund sustainable projects.