Green finance powers Saudi sustainability drive

Riyadh — Green finance is increasingly powering Saudi Arabia’s sustainability and economic diversification agenda, channeling billions of dollars into renewable energy, green hydrogen, clean transportation, water infrastructure and energy-efficiency projects that support Vision 2030. Al Rajhi Bank’s sustainable finance portfolio reached $8.9 billion (more than SR33.3 billion) by the end of 2025, while the bank’s eligible environmental assets stood at around SR1.8 billion ($482 million). Projects financed within Al Rajhi’s portfolio have contributed to avoiding more than 217,000 tonnes of carbon emissions annually.

“Today, we are witnessing sustainable finance in the Kingdom transition from the stage of initiatives to the stage of implementation on a wide scale, driven by the scale of projects linked to Saudi Vision 2030,” said Hussein Talal Bayari, general manager of corporate banking at Al Rajhi Bank.

Context and details

The growth of green finance in Saudi Arabia is documented in academic and market commentary emphasizing its role in the country’s transition to a lower-carbon economy. A 2025 study by Ahmad Al-Harbi, published in the Journal of Environmental Management and Tourism and titled “Green Financing for Sustainable Development in Saudi Arabia,” frames green financing as a critical enabler for Vision 2030. “Green financing is critical for Saudi Arabia’s transition toward sustainable development, particularly in the context of the Vision 2030 agenda,” the study states, adding that financed projects typically focus on renewable energy, energy efficiency and sustainable land use practices.

Economist and financial analyst Talat Zaki Hafiz highlighted the central role green finance now plays in mobilizing capital for the Kingdom’s transformation. “Since the launch of Saudi Vision 2030 in 2016, the Kingdom has accelerated its transition toward a more diversified and sustainable economy by investing in renewable energy, green hydrogen, and other low-carbon technologies. This transformation is being underpinned by the rapid development of green finance, which is playing a pivotal role in mobilizing the capital needed to support decarbonization, reduce reliance on hydrocarbons, and drive sustainable economic growth,” Hafiz told Arab News.

• Al Rajhi Bank reported eligible environmental assets of around SR1.8 billion ($482 million).
• The bank’s sustainable finance portfolio reached $8.9 billion (SR33.3 billion) by end-2025.
• Financed projects are estimated to avoid more than 217,000 tonnes of carbon emissions per year.

Banks and institutional investors are increasingly steering capital toward large-scale projects linked to Vision 2030, notably solar and wind farms, green hydrogen production, electrified transport and water-efficiency schemes. Hussein Talal Bayari emphasized a shift in banking priorities: financial institutions are now “a key partner in directing investments toward sectors that achieve sustainable economic, social, and environmental impact,” moving from traditional financing toward “responsible financing that balances growth with long-term impact.”

Outlook

Analysts say the long-term measure of success will be whether green finance becomes a mainstream source of capital across Saudi Arabia’s economy. “If, over the next five to 10 years, green finance becomes a mainstream source of capital that drives investment, innovation, industrial diversification, and sustainable economic growth, then Saudi Arabia's green finance strategy can be regarded as a clear success,” Hafiz said. As the Kingdom advances large renewables, hydrogen and decarbonization projects, green finance is expected to remain a quiet but essential mechanism translating policy ambitions into investable, measurable outcomes across emissions reductions, job creation and industrial diversification.