Masdar Secures $1 Billion Through Second Green Bond For Global Renewable Projects

Abu Dhabi Future Energy Company, known as Masdar, has successfully raised US$1 billion through its second green bond issuance under its Green Finance Framework. This follows the company's first issuance of US$750 million on the London Stock Exchange's International Securities Market last year. The latest issuance includes two tranches of US$500 million each, with tenors of 5 and 10 years and coupons of 4.875 and 5.25 percent respectively.

The strong demand from regional and international investors saw the orderbook peak at US$4.6 billion, an oversubscription of 4.6 times. Allocation was finalised with a split of 70 percent to international investors and 30 percent to MENA investors. Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, stated, "Following the successful launch of our first green bond in 2023, our second green bond issuance for US$1 billion underscores investor confidence in Masdar’s financial robustness and its sustainability credentials."

The proceeds from this issuance will be used to fund Masdar’s equity commitments on new greenfield projects, many in developing economies. This is part of Masdar's goal to achieve a portfolio capacity of 100GW by 2030. Al Ramahi added that these funds are crucial for advancing their renewable energy projects and supporting an equitable energy transition by increasing energy access in emerging markets and the Global South.

Mazin Khan, Chief Financial Officer of Masdar, highlighted the importance of their Green Finance Framework in raising green bonds and other finance instruments for new dark green projects. He said, "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." Khan emphasised that this commitment is transparently fulfilled through their audited annual allocation and impact reporting.

Masdar's approach ensures that investors know exactly where their money is going and its impact across the ESG spectrum. Khan noted that few companies as highly rated as Masdar offer bonds that can make such a positive impact. He added, "Few companies as strongly rated as Masdar offer investors bonds that can make such a positive impact across the ESG spectrum."

The announcement comes one year after Masdar's first successful issuance on the London Stock Exchange. The dual tranches issued this time reflect strong investor confidence in Masdar’s financial health and sustainability efforts.

Masdar continues to play a pivotal role in supporting global energy transitions by focusing on renewable energy projects in emerging markets. The funds raised will help them pursue ambitious targets while ensuring transparency and accountability to their investors.

This latest bond issuance underscores Masdar's commitment to sustainable development and its strategic role in increasing energy access worldwide.

With inputs from WAM