Saudi Arabia plans to deploy 50 per cent of its investments in renewable and sustainable power sources and will issue a green sukuk soon, the governor of the kingdom’s Public Investment Fund and Saudi Aramco chairman said.
“The kingdom aims to deploy 50 per cent of its investments in renewable and sustainable power sources, more than two-thirds from investment. We are one of the most efficient countries when it comes to sustainability and renewable energy,” Yasir Al Rumayyan said during a virtual roundtable organised by the Future Investment Institute in New York on Tuesday.
Although Saudi Arabia is the world’s largest oil exporter, it fares much better than other producers when it comes to carbon dioxide emissions, Mr Al Rumayyan said.
Saudi Arabia is Opec's largest producer and accounts for 12.5 per cent of all oil production, according to the BP Statistical Review of World Energy 2021.
Under its Vision 2030 initiative, the kingdom is taking measures to diversify its economy away from hydrocarbons and to decarbonise its utility systems. The country plans to generate up to 50 per cent of its electricity from clean sources.
The PIF has been given the mandate to develop nearly 70 per cent of renewable projects in Saudi Arabia. Utilities and renewables are among the 13 sectors identified by the fund as part of its Vision 2030 strategy.
Saudi Arabia’s $430 billion sovereign wealth fund will announce its first green sukuk issuance soon, as it looks to increase the role that environmental, social and governance principles (ESG) play in its investments, Mr Al Rumayyan said.
“We will be the first sovereign wealth fund to issue green debt. Some of our portfolio companies have already issued green debt. The Red Sea [Development] Company issued green debt worth $3.7bn,” Aramco’s chairman added.
We will be the first sovereign wealth fund to issue green debt
Yasir Al Rumayyan,
governor of Public Investment Fund and Saudi Aramco chairman
The PIF is also working with the world’s largest asset manager BlackRock to develop an ESG framework, Mr Al Rumayyan said.
“We’re working with many partners from all over the world, domestically and internationally, to have a better ESG compliance in all the things that we do,” he added.
The fund is also working with ratings agencies to standardise the ESG framework and address the inconsistencies in rankings from different agencies.
As part of developing its own ESG framework, the PIF is looking to “gradually” turn down investments that lack sustainability plans, he added.
The PIF has been investing more in businesses that focus on pivoting away from fossil fuels. It boosted its stake in utility developer ACWA Power International, which is spending heavily on renewable energy, and also invested in electric vehicle manufacturer Lucid.
Oil “should be used more efficiently, such as in crude to chemical, which produces zero emissions. We don’t want to exploit all our resources overnight,” Mr Al Rumayyan said.
Saudi Arabia has been meeting future sustainability targets set by global initiatives for the past several years, he added.
“About 70 per cent of our population is under the age of 35. We want to think about the future generations of Saudi Arabia. You cannot separate health from economies and from sustainability,” the PIF governor said.
He added that the cost of solar power production in Saudi Arabia stands at 1.2 cents per kilowatt/hour, versus 15 cents for other producers.
The PIF and the Arab world’s biggest bourse Tadawul announced a plan this month to set up the Riyadh Voluntary Exchange Platform for offsets and carbon credits within the Middle East and North Africa.
The platform will become the primary destination for companies and institutions that target reducing their emissions, or contributing towards reductions, through the trading of verified, approved and high quality carbon equivalent credits certificates, according to the state-run Saudi Press Agency.
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Fasset%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2019%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohammad%20Raafi%20Hossain%2C%20Daniel%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%3C%2Fstrong%3E%20%242.45%20million%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2086%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-series%20B%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Investcorp%2C%20Liberty%20City%20Ventures%2C%20Fatima%20Gobi%20Ventures%2C%20Primal%20Capital%2C%20Wealthwell%20Ventures%2C%20FHS%20Capital%2C%20VN2%20Capital%2C%20local%20family%20offices%3C%2Fp%3E%0A
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
How to increase your savings
- Have a plan for your savings.
- Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
- Decide on a financial goal that is important to you and put your savings to work for you.
- It's important to have a purpose for your savings as it helps to keep you motivated to continue while also reducing the temptation to spend your savings.
- Carol Glynn, founder of Conscious Finance Coaching
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Monster
Directed by: Anthony Mandler
Starring: Kelvin Harrison Jr., John David Washington
3/5
Zayed Sustainability Prize
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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