Masdar’s Inaugural Green Bond Raises $750 Million in Debut Offering
Under the adept legal leadership of General Counsel Jonathan Evans, Masdar, the Abu Dhabi Future Energy Company, celebrated a significant achievement as it completed its inaugural green bond issuance. The issuance amounted to $750 million in 10-year senior unsecured Notes, garnering overwhelming support from both regional and international investors. The impressive demand was evident from the orderbook, which reached a remarkable $4.2 billion, showcasing an impressive oversubscription of 5.6 times.
The success of the bond issuance reflects the investor community’s unwavering confidence in Masdar’s financial strength, further bolstered by its credit ratings of A2 (Moody’s) and A+ (Fitch). Additionally, Masdar’s remarkable 17-year track record in sustainability has further cemented its position as a frontrunner in the field.
Aligned with Masdar’s Green Finance Framework, the net proceeds from this green bond and future offerings will be exclusively invested in ‘dark green’ renewable energy projects. These projects will predominantly be located in developing economies and climate-vulnerable countries, where much-needed investment drives sustainable development. This debut bond issuance signifies the initial step in Masdar’s long-term strategy to raise up to $3 billion for new renewable energy projects.
The green bond programme’s primary objective is to bolster Masdar’s equity funding commitments for new renewable energy projects across the globe. With ambitious goals in mind, the company aims to expand its global portfolio to 100GW of capacity by 2030. Under this programme, all bond offerings will be exclusively directed towards the most environmentally sustainable projects in the renewables sector, encompassing solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets.
To ensure unwavering adherence to environmental, social, and governance (ESG) standards, rigorous criteria will govern the eligibility of projects.
The bond has received an A2 rating from Moody’s and an A+ rating from Fitch, in line with the company’s credit ratings. The final coupon rate has been set at 4.875 per cent, and the bond is set to mature on July 25, 2033.
The issuance was expertly managed and offered through a syndicate of joint lead managers and bookrunners, including BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Société Générale, and Standard Chartered.
Masdar’s Green Finance Framework, established in February 2023 and updated in May 2023, fully adheres to the latest Green Loan Principles. To ensure even greater credibility, Moody’s has issued a Second Party Opinion on the framework, further solidifying Masdar’s dedication to sustainable finance.
Founded in 2006, Masdar stands as the UAE’s foremost clean energy entity, operating across more than 40 countries and investing in a diverse portfolio of renewable energy projects, totalling approximately 20GW in capacity. Looking ahead, the company has set its sights on an ambitious target of achieving at least 100GW of capacity by 2030, alongside green hydrogen production of 1 million tonnes per annum within the same timeframe.