Masdar, the leading renewable energy company based in the UAE, introduces a $750 million 10-year green bond for the first time.
Masdar Issues $750 Million Green Bond for Renewable Energy Projects
Masdar, the Abu Dhabi-based renewable energy company, has successfully issued a US$750 million 10-year Green Bond. The bond, which was 5.6x oversubscribed, demonstrates strong investor interest in Masdar's financial strength and sustainability credentials.
The proceeds from the bond will be used to develop new renewable energy projects around the world. According to Niall Hannigan, the Chief Financial Officer of Masdar, the funds will be deployed towards solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets. The bond issuance is the first part of a program to raise up to US$3 billion for renewable energy projects.
The bond, which was priced at a coupon rate of 4.875% with maturity on 25 July 2033, was arranged and offered through a syndicate of joint lead managers and bookrunners. Allocation of the bond was finalized with 87.5% going to international investors and 12.5% to MENA investors.
Masdar's Green Finance Framework, which was updated in May 2023 to reflect changes to the Green Loan Principles, will guide the use of the proceeds from the bond. Strict ESG criteria will apply to restrict the eligibility of projects.
The proceeds from the bond will fund a broad range of renewable energy projects across multiple geographies. Key projects include the Al Dhafra Solar Photovoltaic Power Plant in the UAE, the East Anglia 3 Offshore Wind Farm in the UK, wind farm developments in the UK, 1 GW Photovoltaic Projects in Azerbaijan, and the Sharjah Waste-to-Energy Project in the UAE.
Masdar's portfolio covers clean energy projects in over 40 countries, spanning solar, wind (onshore and offshore), waste-to-energy, biofuels, and emerging green hydrogen technologies. By 2024, Masdar’s renewable capacity was 51 GW, with plans to nearly double that to 100 GW by 2030 through a mixture of green bond issuances, debt financing, acquisitions, and new project developments in markets including the Middle East, Europe, North America, and Central Asia.
Moody's has issued a Second Party Opinion on the Green Finance Framework, and Masdar has credit ratings of A2 (Moody's) and A+ (Fitch). The bond landing spread of 115bps over US Treasuries indicates investor confidence in Masdar's financial strength and sustainability credentials.
Masdar is also targeting green hydrogen production of 1 million tonnes per annum by the same year. The company's transition strategy and scale-up ambitions aim to make it one of the world’s largest renewable energy companies by 2030.
- Masdar's successful Green Bond issuance of $750 million will fund a variety of renewable energy projects worldwide.
- The funds from the Green Bond will be allocated towards solar, wind, renewable power transmission and distribution infrastructure, battery storage assets, and more, as stated by Niall Hannigan, Masdar's Chief Financial Officer.
- The bond issuance is the initial part of a larger plan to raise up to $3 billion for renewable energy projects, demonstrating strong investor faith in Masdar's financial strength and sustainability.
- To ensure the projects meet strict environmental, social, and governance (ESG) criteria, Masdar's updated Green Finance Framework will guide the bond proceeds' use.
- Masdar aims to produce 1 million tonnes of green hydrogen annually and become one of the world’s largest renewable energy companies by 2030, highlighting its commitment to clean energy, sustainability, and combating climate change.
