Arab Energy Fund Gets Approval to Issue Panda Bonds in China, a First for MENA Multilateral Institutions

The Arab Energy Fund (TAEF) has been authorized by regulatory bodies to issue Panda bonds in China and, thus, to enter the Chinese market; this is the first time a regional multilateral financial institution will have such access. TAEF, which is based in Riyadh, is now the first to get this approval and has directly gained a foothold in the Chinese domestic bond market, where it will be able to compete with others based on more than the global markets alone.

NAFMII, the National Association of Financial Market Institutional Investors, which is the regulator of the interbank bond market, granted the approval. The approval is very important, as it allows TAEF to raise money in Renminbi right inside China and not just be limited to other international markets.

Through this program, TAEF is permitted to offer bonds translated into Renminbi worth up to 10 billion yuan (around $1.4 billion). The fund has the option to issue the Panda bonds in three tranches over a period of two years, which allows it to increase its capital stage by stage according to the investment needs and the market conditions.

The announcement is made just as the Gulf Cooperation Council (GCC) countries, with Saudi Arabia on the forefront, are drawing closer to China. In this connection, Arab News says that the recent high-level visits have opened the door to more agreements and partnerships in investment and technology transfer in sectors that are aligned with Vision 2030.

The article also points out that in December, the Chinese Foreign Minister Wang Yi referred to the China-GCC partnership as an alliance “of transforming interests and sharpening resilience that will extend through the Global South.”

Vicky Bhatia, TAEF’s Chief Financial Officer, said the approval is a step in the right direction for the fund that wants to diversify its funding sources through a deep pool of Chinese investors. Besides, it will be a good starting point for a close collaboration between a well-rated multilateral financial institution from the MENA region and China’s capital markets.

Panda bonds are being marketed as a stable and immediate source of Renminbi financing. TAEF sees this as a way to strengthen its capital allocation planning for investments across the entire energy spectrum.

According to Arab News, the fund’s position in the energy sector is stable and long-standing. With a 50-year track record, strong governance, and high international credit rating, TAEF invests in conventional energy, energy infrastructure, and wider energy transition solutions. TAEF’s entry into the onshore panda bond market not only reinforces its position as a reliable multilateral partner but also as an active player in the global capital market.

This event not only marks the increasing reliance of China as a source of finance for international energy projects but also the growing financial interdependence of the MENA region with Asia, particularly as the cross-border investment ties become stronger.