Masdar's second green bond fuels renewable expansion

Abu Dhabi Future Energy Company PJSC – Masdar, the UAE’s clean energy leader, has successfully raised US$1bn through its second green bond issuance under its Green Finance Framework

This comes a year after the company’s first issuance of US$750mn on the International Securities Market of the London Stock Exchange.

The issuance consists of two tranches of US$500mn each, with tenors of five and ten years and coupons of 4.875% and 5.25% respectively. There was strong demand from regional and international investors, with the order book reaching US$4.6bn, an oversubscription of 4.6 times. The final allocation split was approximately 70% to international investors and 30% to MENA investors.

Empowering green futures

The US$1bn proceeds from the issuance will fund Masdar’s equity commitments on new greenfield projects, many in developing economies, as the company aims for a target portfolio capacity of 100GW by 2030.

Masdar’s 2023 Green Finance Report, highlighting the delivery of its commitments under the Green Finance Framework, which has the highest possible rating from Moody’s of SQS-1, detailed the allocation and impact of its debut green bond. The proceeds have funded projects in emerging markets and the Global South with a total nominal capacity of 3.7 GW and are expected to mitigate 5.4 million tonnes of GHG emissions annually when fully operational.

Besides the green bond program, Masdar is acquiring operational companies in mature markets, injecting capital and expertise, significantly contributing to the global renewable energy capacity.

Mohamed Jameel Al Ramahi, CEO of Masdar, stated, “Following the successful launch of our first green bond in 2023, our second green bond issuance for US$1bn underscores investor confidence in Masdar’s financial robustness and its sustainability credentials. The funds will be pivotal in advancing our ambitious portfolio of renewable energy projects, further cementing our role as a key player in supporting an equitable energy transition by increasing energy access in emerging markets and the Global South.”

Mazin Khan, chief financial officer of Masdar, added, “As we have committed under our Green Finance Framework, we are raising green bonds and other green finance instruments to invest in new dark green projects. This is an important component of our investor relations story, but it is also a commitment that we are transparently fulfilling through the publication of our audited annual allocation and impact reporting. Few companies as strongly rated as Masdar offer investors bonds that can make such a positive impact across the ESG spectrum. Even fewer companies can tell investors exactly where every dollar of their money is going and its impact.”

Aligned with Masdar’s corporate credit ratings, this second issuance was rated AA- by Fitch and A2 by Moody’s. Fitch recently upgraded Masdar's credit rating to 'AA-', with a stable outlook, recognising the company’s financial strength and shareholder support, evidenced by their significant contributions to fund Masdar's growth ambitions.

The joint lead managers and bookrunners for the issuance were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis, and MUFG.