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Definition

Saudi sustainable debt framework

Saudi CMA guidelines cover green, social, sustainability, and sustainability-linked debt issued in Saudi riyals through private or public offers in the Kingdom; issuers must disclose departures in their issuance framework or prospectus.

What is the Saudi sustainable debt framework?

The Capital Market Authority (CMA) guidelines took effect on 27 May 2025. They cover green, social, sustainability, and sustainability-linked debt denominated in Saudi riyals and offered privately or publicly in the Kingdom. See the Saudi Arabia requirements guide for the other disclosure rules that may apply to your issue. The first three labels reserve proceeds for eligible projects. Sustainability-linked debt can use proceeds for general business purposes. A key performance indicator (KPI) measures the result being tracked. A sustainability performance target (SPT) sets the result the issuer must reach.

Why does the Saudi sustainable debt framework matter to you?

If your company plans one of these issues, finance and sustainability teams need a consistent framework, external review and post-issuance reports. A public offer also requires a prospectus. Investors must be able to trace proceeds or target results.

How does the Saudi sustainable debt framework work?

For use-of-proceeds debt, document eligible projects, selection criteria, risks, proceeds management, and unallocated money. For a public offer, publish the framework and external review before or with the prospectus, then keep both on Tadawul. Report to investors at least annually until full allocation.

What mistakes should you avoid?

  • Calling general-purpose debt green because the issuer has environmental targets.
  • Omitting each project's allocated amount from the annual report.
  • Using a reviewer that is not ICMA-listed and Saudi-licensed.
  • Leaving a departure from the guidelines unexplained.

Is compliance with every guideline provision mandatory?

No. The provisions are guidance, but an in-scope issuer must disclose each departure in its issuance framework or offering document.

How are sustainability-linked instruments different?

Their proceeds may fund general corporate purposes. Their terms instead depend on measurable, externally verifiable KPIs, pre-set SPTs, and stated consequences.

What do you send investors after issuance?

For use-of-proceeds debt, report allocations and project impacts. For sustainability-linked debt, update KPIs and provide external verification of SPT performance and its effect on the instrument.

Example

Because the framework applies to instruments denominated in Saudi riyals and offered in the Kingdom, this example uses a Saudi Arabian aluminium extruder instead of the assigned Malaysian location.

Suppose the extruder issues SAR 120 million of green debt. Its framework allocates SAR 70 million to rooftop solar and SAR 30 million to efficient extrusion presses. The first annual report shows SAR 100 million allocated: SAR 70 million + SAR 30 million = SAR 100 million. That is 83.3% of proceeds, calculated as SAR 100 million / SAR 120 million x 100. The unallocated balance is SAR 20 million. The issuer's framework must explain how the remaining balance will be used and how the net proceeds will be managed.

Where it comes up

Saudi-riyal private and public placements must disclose departures from the guidelinesCMA Guidelines, Scope and Application, paragraph (a)Public use-of-proceeds issues must publish the framework and external review before or with the prospectusCMA Guidelines, Part 1, sections 2(b) and 3(d)Use-of-proceeds issuers must report allocations and project impacts at least annually until full allocationCMA Guidelines, Part 1, section 4(a)Sustainability-linked issuers must report KPI updates and external SPT verificationCMA Guidelines, Part 2, section 6(a)

Related terms

Green Bonds

A green bond is a bond whose proceeds are reserved for eligible projects with environmental benefits; the label applies to the financing, not automatically to the issuer's whole business.

Sustainability-linked bond

A sustainability-linked bond is debt whose financial or structural terms change according to whether the issuer meets predefined sustainability performance targets by specified dates.

Sustainability performance target (SPT)

A sustainability performance target (SPT) is a measurable result set for a key performance indicator by a fixed observation date, with financing terms changing according to whether the result is achieved.

Sources

Last verified 2026-08-20

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Saudi sustainable debt framework Definition | Keslio