Red Sea Tourism Green Financing Accreditation: $3.76 Billion In Saudi Green Financing Secured

Red Sea Tourism Green Financing Accreditation - Green tech news

Last Updated on December 23, 2023 by Editor

Green finance refers to investment funding that brings significant environmental advantages as part of a larger framework for building a sustainable future. Since Saudi Arabia strives to achieve a decarbonized economy by 2060, the region’s Public Investment Fund has unveiled plans to raise green financing. On the other hand, the Red Sea tourist project in Saudi Arabia has received $3.76 billion in green finance. With almost 500 contracts totaling $4 billion approved, the project has reached critical construction phases.

Green financing provides a substantial and yet unexplored possibility for Middle Eastern countries. As part of its attempts to expand its economy and lessen its dependence on oil, Saudi Arabia is planning numerous environmentally oriented massive projects to grow its tourist sector.

Foreign Direct Investment To Be Attracted To The Red Sea Project

Under Vision 2030, Saudi Arabia is promoting tourism and recreational projects throughout the country to attract foreign direct investment (FDI). The scope of this project is unparalleled across the globe and the Red Sea company is utilizing sustainable approaches in construction to reduce its environmental impact. The CEO of TRSDC, John Pagano, says they are aiming to reach a 30% net conservation benefit by 2040 by employing cutting-edge technology and environmentally friendly processes to design.

Setting Forth A Green Financing Strategy Through Sovereign Fund

Saudi Arabia’s ambitious redevelopment plan depends on its Public Investment Fund, which will diversify Saudi Arabia’s economy away from hydrocarbons. PIF has released its framework supporting green finance. It will allow the region to connect to global financial markets to issue debt tied to ecologically beneficial aims, such as green bonds or debts. Last September, the Governor of the Public Investment Fund announced green debt would be released soon. Saudi Arabia is also planning to sell its green bonds. For this purpose, financial advisers have been hired but the structure of green bonds is yet to come.

Efforts To Promote Sustainability Through Projects In Saudi Arabia

Red Sea Development Company has been entitled to accreditation due to utilizing a sustainable approach and green financing for its red sea project. The company managed to achieve its debt financing commitment during the first phase of construction. The project has a better chance of attracting investors because of its completely secured financial structure and capital investment. The Red Sea Project will promote sustainable financing since the company will be able to offer a range of green financial products and services.

Climate Change Mitigation Through The Arab Region’s Financial System

Sustainable finance helps countries achieve carbon neutrality by directing private funds toward carbon-neutral initiatives. Over the last decade, Islamic banking has been the key driver of Arab’s banking system. In the coming years, green Islamic finance products and services will be available largely, giving Saudi Arabia the possibility to export investment products worldwide based on sustainable development goals. In the larger framework of ecological sustainability, the NGFS works to increase the international efforts necessary to reach the Paris agreement goals. Further, it strives to expand the role of the financial sector in managing risks and organizing finance for eco-friendly and zero-emission initiatives. The Network is supported by Arab central banks in developing and supporting guiding principles in sustainable banking.

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