Masdar, the Abu Dhabi Future Energy Company, has successfully completed its inaugural green bond issuance, raising $750 million with a ten-year maturity. The bond received overwhelming demand from investors, reaching a peak orderbook of $4.2 billion, resulting in an oversubscription of 5.6 times.
The pricing tightened by 35 basis points between launch and final terms, settling at a final landing spread of 115 basis points over US Treasuries, and carrying a coupon rate of 4.875 percent.
The bond issuance reflects investor confidence in Masdar’s financial strength and strong sustainability credentials, as evidenced by its credit ratings of A2 (Moody’s) and A+ (Fitch). Aligned with Masdar’s Green Finance Framework, the net proceeds from this and future green bonds will be exclusively invested in “dark green” renewable energy projects, with a focus on developing economies and climate-vulnerable countries.
This issuance marks the first step in a program aiming to raise up to $3 billion in bonds to support Masdar’s equity funding commitments for new renewable energy projects both domestically and internationally. The company’s ambition is to grow its global portfolio to 100GW of capacity by 2030. All bond offerings under the program will contribute to the greenest projects in the renewables sector, including solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets. Strict environmental, social, and governance (ESG) criteria will govern project eligibility.
Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Chairman of Masdar, and COP28 President-Designate, emphasized the importance of climate finance and sustainable development for developing economies, underscoring the significance of Masdar’s green bond issuance ahead of the UN climate change conference, COP28.
Mohamed Jameel Al Ramahi, Masdar’s Chief Executive Officer, expressed gratitude for the trust placed in the company by the financial community, and he looks forward to engaging top-class investors in their journey towards global renewable energy ‘s Chief Financial Officer, highlighted that the proceeds from this green bond issuance will contribute to developing new renewable energy projects worldwide, making a significant impact on climate change mitigation and positively affecting local communities.
The issuance received A2 (Moody’s) and A+ (Fitch) credit ratings, matching the company’s corporate credit ratings. The bond was priced at a coupon rate of 4.875 percent, maturing on 25th July 2033.
Masdar’s Green Finance Framework, established in February 2023, was updated in May 2023 to align with the Green Loan Principles, and Moody’s issued a Second Party Opinion on the Green Finance Framework.
Established in 2006, Masdar is a prominent clean energy player in the UAE, operating in over 40 countries and investing in renewable energy projects with a combined capacity of approximately 20GW. Masdar has ambitious plans to grow this capacity to at least 100GW by 2030, while also aiming to produce 1 million tonnes per annum of green hydrogen by the same year.