Masdar, the UAE’s renowned clean energy firm, has announced the successful completion of its second green bond issuance, raising a substantial USD1 billion. This milestone follows Masdar’s initial issuance of USD750 million just a year ago on the London Stock Exchange’s International Securities Market.
The newly raised funds are divided into two tranches of US$500 million each, with maturities set at 5 and 10 years and coupon rates of 4.875% and 5.25% respectively. This issuance saw overwhelming interest from investors worldwide, with the orderbook reaching a peak of US$4.6 billion, marking a remarkable oversubscription of 4.6 times. International investors claimed 70% of the allocation, while 30% was allotted to investors from the MENA region.
Masdar plans to allocate the USD1 billion proceeds towards its equity commitments in upcoming greenfield projects, particularly in developing economies. These efforts are part of Masdar’s ambitious goal to achieve a portfolio capacity of 100GW by 2030, significantly contributing to global renewable energy expansion.
Highlighting Masdar’s commitment to sustainable finance, the company’s Green Finance Framework has garnered the highest rating of SQS-1 from Moody’s. The 2023 Green Finance Report underlined the impact of Masdar’s inaugural green bond, which funded projects expected to annually mitigate 5.4 million tonnes of greenhouse gas emissions upon completion.
Mohamed Jameel Al Ramahi, CEO of Masdar, expressed confidence in the company’s financial strength and sustainability initiatives following the successful issuance. He emphasized that the funds will play a crucial role in advancing Masdar’s renewable energy projects, promoting energy access in emerging markets and the Global South.
Mazin Khan, CFO of Masdar, reiterated their commitment to transparency and impact reporting under the Green Finance Framework. He emphasized Masdar’s unique position in offering investors bonds that not only yield financial returns but also drive positive environmental and social impacts globally.
Masdar’s corporate credit ratings received a boost with this issuance, rated AA- by Fitch and A2 by Moody’s, reflecting strong financial stability and shareholder support. The issuance was managed by prominent institutions including First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis, and MUFG.
