Abu Dhabi: Masdar has raised $1 billion from its third green bond issuance, achieving the tightest coupon rates yet amid $6.6 billion in global demand, as it accelerates funding for renewable projects and expands its Green Finance Framework.
Abu Dhabi Future Energy Company, known as Masdar, has successfully launched a $1 billion green bond, elevating its total green bond issuance to $2.75 billion. This recent issuance was structured in two equal tranches of $500 million, with differing tenors of five and ten years, carrying coupon rates of 4.875% and 5.375%, respectively.
Investor response to the offering was robust, with a peak order book reaching $6.6 billion, reflecting significant oversubscription from both regional and international markets, including dedicated green funds. This level of interest demonstrates a strengthening investor confidence in Masdar’s sustainability-focused financial strategies. The spreads over US Treasuries for this issuance were fixed at 80 basis points for the five-year tranche and 90 basis points for the ten-year tranche, marking the tightest pricing the company has achieved to date. The allocation was heavily skewed, with 85% directed to international investors and 15% to those in the MENA region.
Mohamed Jameel Al Ramahi, CEO of Masdar, commented on the significance of this bond issuance, stating, “This third issuance demonstrates the continued and growing confidence the investment community places in Masdar’s financial strength and long-term vision.” He highlighted that these funds are pivotal for Masdar’s aspirations in expanding renewable energy capacities across both developed and developing markets. The firm aims to support a wider energy transformation that aligns with global sustainability goals.
Masdar’s green bond programme has seen previous successes, with earlier issuances of $750 million in 2023 and $1 billion in 2024. The proceeds from these securities are dedicated to funding new “dark green” projects that specifically advance renewable energy developments worldwide. The company’s overarching aim is to achieve a remarkable 100 gigawatts (GW) of renewable energy capacity by 2030, reinforcing its commitment amid the UAE’s broader strategic shift towards sustainable energy solutions.
In a notable development earlier this year, Masdar secured $6 billion in non-recourse financing, further financing its ambitions to develop over 11 GW of clean energy capacity across 12 projects in nine countries. This financing underscores the company’s strategy of leveraging sustainable finance on a significant scale, thus enhancing investor involvement in the green finance landscape.
Additionally, Masdar updated its Green Finance Framework in March 2024, expanding its scope to include financing for green hydrogen and standalone battery storage projects. This update is crucial as the renewable energy landscape continues to evolve. Moody’s reaffirmed the framework’s top-tier Sustainability Quality Score of SQS1, reflecting the strength and credibility of Masdar’s commitments to sustainability.
This latest bond issuance garnered a rating of AA- by Fitch and A1 by Moody’s, in line with Masdar’s corporate credit ratings, further validating the company’s strategy and operational resilience. The involvement of several prominent financial institutions as joint lead managers and bookrunners—including First Abu Dhabi Bank and J.P. Morgan—attests to the growing marketplace confidence in Masdar’s capability to lead in renewable energy finance.
The anticipation surrounding Masdar’s continued efforts in the green bond market illustrates the critical intersection of financial mechanisms and environmental sustainability. By aligning capital with projects that aim to mitigate climate change, Masdar not only enhances its own financial prospects but also contributes to the global transition towards a more sustainable energy future.
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Source: Noah Wire Services
- https://gulfbusiness.com/masdar-issues-1bn-green-bond-its-third-issuance/ – Please view link – unable to able to access data
- https://masdar.ae/en/news/newsroom/green-bond – Masdar, the UAE’s clean energy company, successfully raised $1 billion through its second green bond issuance, comprising two equal tranches of $500 million each with tenors of 5 and 10 years and respective coupon rates of 4.875% and 5.25%. The offering was significantly oversubscribed, with a peak orderbook of $4.6 billion, reflecting strong investor confidence. The funds will be used exclusively for new greenfield renewable energy projects under Masdar’s Green Finance Framework, supporting its goal of expanding its renewable energy capacity to 100GW by 2030.
- https://www.ft.com/content/976a331c-c66e-4699-a2d6-fbd0f90bcfb0 – Abu Dhabi’s state-backed clean energy group, Masdar, raised $1 billion through its second green bond issuance on the London Stock Exchange. The issuance was five times oversubscribed and is part of Masdar’s ambition to raise up to $3 billion to deploy 100 gigawatts of renewable energy capacity by 2030. The bond proceeds will fund new greenfield renewable energy projects, reflecting the UAE’s strategic diversification into renewable energy. Despite its fossil fuel background, Masdar’s investments in countries like Uzbekistan, Azerbaijan, Germany, and the UAE underscore its commitment to global energy transition.
- https://masdar.ae/en/news/newsroom/launched-first-us-750-million-10-year-green-bond – Masdar announced the successful completion of its first green bond issuance for $750 million in 2023. The 10-year senior unsecured notes were oversubscribed by 5.6 times, demonstrating strong investor confidence in Masdar’s financial strength and sustainability credentials. The net proceeds will be used exclusively to invest in new clean energy projects under Masdar’s Green Finance Framework, marking the first part of a program to raise up to $3 billion for new renewable energy projects as Masdar aims to grow its global portfolio to 100GW of capacity by 2030.
- https://www.prnewswire.com/news-releases/uae-flagship-renewable-energy-company-masdar-launches-first-us750-million-10-year-green-bond-301880809.html – Masdar successfully completed its first green bond issuance for $750 million in 2023. The 10-year senior unsecured notes were oversubscribed by 5.6 times, reflecting strong investor confidence in Masdar’s financial strength and sustainability credentials. The net proceeds will be used exclusively to invest in new clean energy projects under Masdar’s Green Finance Framework, marking the first part of a program to raise up to $3 billion for new renewable energy projects as Masdar aims to grow its global portfolio to 100GW of capacity by 2030.
- https://www.wam.ae/ar/article/b48nvsk-masdar-raises-billion-through-second-green-bond – Masdar, the UAE’s clean energy powerhouse, announced it has successfully raised $1 billion through its second green bond issuance under its Green Finance Framework. The announcement comes one year after the company’s first successful issuance of $750 million on the International Securities Market of the London Stock Exchange. The funds will be deployed to fund Masdar’s equity commitments on new greenfield projects, several in developing economies, as the company pursues a target portfolio capacity of 100GW by 2030.
- https://www.ca-cib.com/en/news/abu-dhabi-future-energy-company-pjsc-masdar-raises-usd1-billion-green-bond – On July 18th, Masdar, the UAE’s clean energy champion, raised $1 billion through its second green bond under its Green Finance Framework, which received the highest possible rating from Moody’s of SQS1. The issuance comprised dual tranches of $500 million each, with tenors of 5 and 10 years and coupons of 4.875% and 5.25% respectively. The funds will be deployed to fund Masdar’s equity commitments on new greenfield projects, several in developing economies, as the company pursues a target portfolio renewable energy capacity of 100GW by 2030.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative mentions recent events, such as the latest bond issuance and updates to Masdar’s Green Finance Framework in March 2024, indicating it is current.
Quotes check
Score:
8
Notes:
The quote from Mohamed Jameel Al Ramahi is present, but its original source or date could not be verified independently.
Source reliability
Score:
8
Notes:
The information originates from Gulf Business, which is not a top-tier international publication like the Financial Times or BBC, but it is a reliable source for Middle Eastern business news.
Plausability check
Score:
9
Notes:
The claims about Masdar’s financial and sustainability goals are plausible, given the context of increasing investor interest in green finance.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, with recent events and plausible claims about Masdar’s financial and sustainability strategies. While the quote verification is limited, the overall reliability of the source supports the narrative’s validity.
