Article 45 of the Saudi Environment Law

This Article extends the effect of the Environment Law to the financing stage, requiring lending funds to take into account the environmental aspects and considerations of the projects they finance or lend to.

Environmental considerations, as defined in Article 1, means everything that must be taken into account when planning any project, in terms of environmental laws, decisions, strategies and programs. So a fund is expected not to look at a project from the financial side alone, but to consider its environmental impact and how consistent it is with environmental laws and programs.

The obligation covers two situations:

• Projects the fund finances.
• Projects it lends to.

The Article does not say how this consideration is to be done, whether the borrower is asked for particular documents or studies, or which lending funds are meant in detail; these matters cannot be taken from the text itself.

The practical effect for a project owner is that the environmental side may be among the matters the fund considers when reviewing a financing request. So anyone planning a project with an environmental impact should take the requirements of the Environment Law into account from the start, including those on permits and licenses, since the Law defines a permit as a document that the competent authority gives to a person before starting any activity that has an environmental impact.

This Article comes in the chapter on final provisions, after Article 44 on precautionary suspension and before Article 46, which makes the provisions of the Law and the regulations the minimum for achieving compliance with the controls and standards needed to protect the environment. To ask about the requirements of a particular project, you may wish to consult a lawyer who specializes in environmental law.