UAE-based clean energy company Masdar has raised $1 billion through its second green bond issuance under its Green Finance Framework. The new issuance follows Masdar's first green bond launch of $750 million on the International Securities Market of the London Stock Exchange last year.
The latest issuance consists of dual tranches: $500 million each, with maturities of five and ten years, and coupons of 4.875% and 5.25%, respectively. The bond attracted significant interest, with the order book reaching $4.6 billion, reflecting an oversubscription of 4.6 times.
The allocation of the bonds was finalized with 70% going to international investors and 30% to investors from the MENA region.
Masdar plans to use the $1 billion proceeds to support its equity commitments on new greenfield projects, including several in developing economies. The company aims to achieve a portfolio capacity of 100 gigawatts (GW) by 2030.
In its recently released 2023 Green Finance Report, Masdar highlighted the impact of its first green bond issuance. The funds from that bond have been allocated to projects in emerging markets and the Global South, totaling 3.7 GW in capacity and expected to mitigate 5.4 million tonnes of greenhouse gas emissions annually upon full operation.
Masdar's CEO, Mohamed Jameel Al Ramahi, stated, “Following the successful launch of our first green bond in 2023, our second green bond issuance for $1 billion underscores investor confidence in Masdar's financial robustness and its sustainability credentials.” He added, “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.”
Chief Financial Officer Mazin Khan commented, “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.”
The green bond issuance received ratings of AA- from Fitch and A2 from Moody's. Fitch recently upgraded Masdar's credit rating to ‘AA-', recognizing the company's financial strength and shareholder support.
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.
