Masdar Raises USD 1 Billion Through Green Bond Issuance To Support Renewable Energy Projects

Abu Dhabi Future Energy Company PJSC, known as Masdar, has issued a new US$1 billion green bond. This brings its total outstanding green bonds to US$2.75 billion, reinforcing its leadership in sustainable finance. The bond was split into two tranches of US$500 million each, with tenors of 5 and 10 years and coupons of 4.875% and 5.375%, respectively.

The issuance attracted significant interest, with a peak orderbook reaching US$6.6 billion. This demand came from both regional and international investors, including dedicated green funds. The spreads over US Treasuries were set at 80 basis points for the 5-year tranche and 90 basis points for the 10-year tranche, marking the tightest pricing achieved by Masdar so far.

Masdar is recognised globally for its commitment to sustainable finance. In recent years, it has issued green bonds worth US$750 million and US$1 billion in 2023 and 2024, respectively. These funds have been allocated to new greenfield projects in both developed and developing economies.

In addition to its green bond programme, Masdar's financing activities in 2024 included issuing US$6 billion of non-recourse financing. This funding supports the development of over 11 gigawatts (GW) of clean energy capacity across 12 new projects in nine countries.

Mazin Khan, Chief Financial Officer of Masdar, stated that this latest issuance aligns with Masdar’s Green Finance Framework. He noted that it highlights investor confidence in Masdar’s financial resilience and strategic direction. Khan emphasised that Masdar is raising sustainable finance on an industrial scale to support clean energy projects globally.

Mohamed Jameel Al Ramahi, CEO of Masdar, expressed that this third issuance shows growing confidence from the investment community in Masdar’s financial strength and long-term vision. He highlighted that the funds will help achieve portfolio capacity targets and support global energy transformation.

All proceeds from the bond programme are dedicated exclusively to developing new 'dark green' renewable energy projects. This allocation provides investors with assurance about how their money is being used.

Masdar updated its Green Finance Framework in March to include eligibility for green hydrogen and standalone battery storage projects. Moody’s reaffirmed its Sustainability Quality Score of SQS1 (Excellent) for this updated framework in April.

Collaborative Efforts with Financial Institutions

The joint lead managers and bookrunners for this issuance included First Abu Dhabi Bank, Abu Dhabi Commercial Bank, J.P. Morgan, ING, Intesa Sanpaolo, Bank of China, DBS Bank, BNP Paribas, and Crédit Agricole.

The company’s third bond issuance received ratings of AA- by Fitch and A1 by Moody’s, consistent with Masdar’s corporate credit ratings.

This initiative underscores Masdar's role in advancing sustainable finance while providing investors opportunities to contribute to the green financing agenda.

With inputs from WAM