INTEGRATED ANNUAL REPORT 2025

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    Decorative path

    sustainable financing at alrajhi bank

    oversight of the sustainable finance framework 

    alrajhi bank’s Sustainable Finance Working Group (SFWG) is responsible for governing and implementing the initiatives set out in the Sustainable Finance Framework. The SFWG comprises of several members of the bank’s senior leadership; It is chaired by the Chief Financial Officer (CFO), and comprises the Chief Risk Officer (CRO), the General Managers of both B2B and B2C business verticals, and the Group Treasurer. The SFWG’s responsibilities entail the following:

    • Meet at least twice each year, with meetings distributed evenly throughout the year
    • Ensure that the approval of eligible sustainable projects will follow the bank’s existing loan approval processes
    • Ratify eligible sustainable projects that have been proposed by the constituent group members
    • Ensure that all eligible sustainable projects have been assessed from an environmental and social risk management perspective, in line with alrajhi bank’s existing risk management framework
    • Undertake regular monitoring of all projects to ensure the eligibility of sustainable projects with the criteria set out below, whilst replacing any ineligible sustainable projects with new eligible sustainable projects
    • Facilitate regular reporting on any sustainable issuance in alignment with the bank’s reporting commitments
    • Review and update the Framework regularly

    The SFWG met twice during the reporting period. Topics discussed during the meetings included the success and impact of ongoing projects, potential future projects, as well as the progress of Asset Allocation Report 2026 and the green and social assets of the bank.

    alrajhi bank will allocate an amount equal to or greater than the net proceeds from the Sustainable Financing Instruments issued under this Framework to finance or re-finance, either fully or partially, sustainable projects that meet the eligibility criteria of the following categories of Eligible Sustainable Projects, as defined below.

    Eligible Green Categories

    Green projects category Eligibility criteria Impact reporting metrics
    Renewable Energy Projects related to the production, transmission and storage of energy from the following renewable sources:
    • Solar (PV and Concentrated Solar Power with a minimum 85% of power generation derived from solar sources)
    • Wind energy
    • Green hydrogen and green ammonia (from electrolysis powered by 100% renewable energy including wind and solar)
    • Biofuels produced from waste sources, such as used cooking oil
    • Biomass from sustainable feedstock only1
    • Capacity of renewable energy plant(s) constructed or rehabilitated in MW
    • Annual renewable energy generation in MWh/GWh (electricity) and GJ/TJ
      (other energy)
    • Annual GHG emissions reduced/avoided in tonnes of CO2 equivalent
      (where possible)

    1 Feedstock is sourced from local agricultural and forestry residues to protect terrestrial carbon pools and avoid competition with food production.

    Green projects category Eligibility criteria Impact reporting metrics
    Energy efficiency Projects that reduce energy consumption by at least 20% compared to the average of national energy consumption of an equivalent project or technology, such as:
    • District cooling systems
    • Upgrade in grid infrastructure to improve electricity transmission efficiency and reduce transmission losses
    • Investment in smart energy grids, energy meters, management systems and battery storage facilities
    • Upgrading older generation (3G/4G) telecommunications infrastructure and
      networks to 5G
    For the avoidance of doubt, improvement activities that result in the lock-in of fossil fuel technologies will be excluded
    • Annual energy savings in MWh (electricity) and GJ/TJ (other energy savings)
    Sustainable Water and Wastewater Management Projects related to construction, upgrades, renovations or improvements for transportation and treatment of wastewater, including:
    • Water and wastewater treatment plants (WWTP) including reuse of WWTP effluents
    • Sewer systems and pumping stations
    • Projects that increase water-use efficiency, such as water recycling and reuse projects, water saving systems, technologies and water metering
    • Water desalination projects running on reverse osmosis technology with a carbon intensity of less than 100gCO2e/kWh over the residual asset life.
      (The asset may be partially powered by renewables)
    • Annual reduction in water use as a %
    • Annual amount of wastewater treated, reused or avoided before and after the project in m3/a
    Pollution Prevention and Control Projects related to construction, upgrades and renovation of facilities for collection, sorting, processing and conversion and treatment of waste, including:
    • Waste collection and storage
    • Waste sorting, separation and material recovery
    • Recycling and reuse
    • Biological treatment facilities (including anaerobic digestion and composting facilities)
    • Waste to energy plants, where recyclables are sorted and there is bottom ash recovery
    • Waste reduced/avoided (tonnes)
    • Annual GHG emissions reduced/avoided (tonnes of CO2 equivalent)

    Green projects category Eligibility criteria Impact reporting metrics
    Environmentally Sustainable Management of Living Natural Resources and Land Use
    		 Projects related to sustainable forestry practices certified in accordance with the Forestry Stewardship Council (FSC) or Programme for the Endorsement of Forest Certified (PEFC)
    • Amount or % of water consumption reduced
    • Increase in production efficiency
    • Maintenance/safeguarding/increase of natural landscape area (including forest) in km2 and in % for increase
    • Increase of area under certified land management in km2 or m2 and in % (in buffer zones of protected areas)
    • Annual GHG emissions reduced in tCO2e p.a.
    Clean Transportation Projects related to low carbon vehicles and associated infrastructure for public, passenger and freight transportation meeting the following criteria:
    • passenger cars and public rail transportation (under 75gCO2/km up to 2020, and 50gCO2/km thereafter up till 2030);
    • freight transportation (under 25gCO2/t-km up till 2030, 21gCO2/tkm from 2030 up to 2050)
    Projects supporting the deployment of electric vehicles including charging infrastructure
    • Number and type of clean transportation infrastructure financed
    • Annual GHG emissions reduced/avoided in tonnes of CO2 equivalent

    Green projects category Eligibility criteria Impact reporting metrics
    Green Buildings Projects related to acquisition, development, construction and refurbishment of buildings that belongs to the top 15% in terms of energy efficiency of their local market or have received, or expect to receive based on its design, construction and operational plans, certification according to third-party verified green building standards, including:
    • LEED ‘Gold’ or above
    • Mostadam ‘Gold’ or above
    • BREEAM ‘Excellent’ or above
    • Global Sustainability Assessment System (GSAS)
      ‘4 star’ or above
    Projects related to acquisition, development, construction and refurbishment of data centres with a PUE of under 1.52
    • Type of scheme, certification level
    • Energy efficiency gains in MWh or % versus baseline/building code

    Eligible Social Categories

    Social projects category Eligibility criteria Impact reporting metrics
    Employment Generation, and Programmes Designed to Prevent and/or Alleviate Unemployment Stemming from Socio-economic Crises
    		 Financing and/or refinancing of loans to Micro, Small and Medium Enterprises (MSME) and microfinance clients, as well as the provision of support measures to these clients such as offering extension of payment periods and exemption of facility fees during natural disasters and pandemics Target Populations:
    • MSMEs3
    • Women-owned and women-focused businesses
    • MSMEs whose economic activities have been affected by pandemic and natural disasters
    • Number and amount
      of loans to SMEs
    • Number and amount
      of loans to women-owned SMEs
    • Number and amount
      of loans to microfinance entities
    • Number and amount
      of microfinance loans

    2 The Uptime Institute performs an annual survey of data centre operators, assessing the average Power Usage Effectiveness (PUE). In the 2021 survey, the average annualised data centre PUE was 1.57, a minor improvement from 1.59 in 2020, with little change on the preceding 3 years. The bank therefore views a PUE of 1.5 as a suitable benchmark below the industry average.

    3 Micro, small and medium enterprises are classified according to the definitions of the General Authority for Small and Medium Enterprises (Monsha’at). Micro businesses are companies with revenues of up to X 3 Mn., small-sized companies are those with revenues ranging from X 3 Mn. to X 40 Mn., and medium-sized companies are those with revenues ranging from X 40 Mn. to X 200 Mn.

    Social projects category Eligibility criteria Impact reporting metrics
    Affordable Housing Financing and/or refinancing of government-supported or government subsidised mortgages in partnership with mortgage financing programmes for the provision of affordable housing as well as projects related to the development and construction of homes covered under such programmes Target Population: Populations eligible for government-supported affordable housing mortgage financing schemes
    • Number of housing units constructed
    • Number of individuals
      and families benefiting from subsidised housing
    Access to Essential Services Projects related to the construction or expansion of public hospitals and schools for the provision of
    not-for-profit, free or subsidised healthcare and education, including government-owned
    public-private partnerships (PPP) for the:
    • Provision/distribution of healthcare equipment and public services
    • Infrastructure for the provision of emergency medical response and disease control services
    • Provision of child, youth or adult education and vocational training services
    Target Population: General population, including populations that lack quality access to essential goods and services
    • Number of people benefited (e.g. patients benefited or students supported)
    • Number of public hospitals, clinics and health care centres financed
    • Numbers of places
      and beds
    • Number of schools and universities financed

    The bank will take measures to disclose to investors the expected share of financing versus refinancing for any Sustainable Financing instrument.

    The Sustainable Finance Register, which is used to allocate funds towards Eligible Sustainable Projects, will contain information relating to:

    • Sustainable Financing Instrument details: pricing date, maturity date, principal amount of proceeds, coupon, ISIN number etc.
    • Eligible Sustainable Projects, including the project category, project description, project location, total loan amount and the Banks’s loan amount, amount disbursed, settled currency etc.
    • Amount of unallocated proceeds
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