UAE’s Green Energy Company Masdar Raises $750 Million Through Green Bonds
The offering was oversubscribed by 5.6 times the initial offering size
Abu Dhabi Future Energy Company Masdar has completed its inaugural green bond issuance, raising $750 million by issuing 10-year senior unsecured notes.
The offering received interest from both regional and international investors, resulting in an oversubscription of 5.6 times the initial offering size, with the order book peaking at $4.2 billion.
The bond’s pricing experienced a tightening of 35 basis points from its launch to the final terms, settling at a final landing spread of 115 basis points over the U.S. Treasuries and featuring a coupon rate of 4.875%.
The allocation of the bond was finalized, with 87.5% of the offering going to international investors and the remaining 12.5% allocated to investors from the Middle East and North Africa region.
The issuance of the bond was coordinated and offered through a syndicate of joint lead managers and book runners, which included BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Société Générale, and Standard Chartered.
In line with Masdar’s Green Finance Framework, the funds raised from this bond issuance, as well as any future offerings, will be dedicated to investment in ‘dark green’ renewable energy projects.
These projects will focus on developing economies and climate-vulnerable nations where there is a pressing demand for investment in sustainable initiatives.
The issuance of this bond marks the initial phase of a larger program aimed at raising up to $3 billion in bonds. The funds will be used to fulfill the UAE government-owned renewable energy company’s equity funding obligations for upcoming renewable energy projects, both domestically and internationally.
Masdar aims to expand its global portfolio to achieve a capacity of 100 GW by 2030. The proceeds from the bond offerings will be directed to support green projects in the renewable energy sector, including solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets. These projects will be subject to stringent Environmental, Social, and Governance criteria to ensure their adherence to sustainable and responsible practices.
Last month, Masdar, Infinity Power, and Hassan Allam Utilities signed an agreement with Egypt’s New and Renewable Energy Authority to develop a 10 GW onshore wind farm in Egypt. With a project value exceeding $10 billion, the wind farm is set to be one of the largest in the world, the company said.
Earlier, the company had signed agreements with Angola, Uganda, and Zambia to develop renewable energy projects with a combined capacity of up to 5 GW to help African nations make the energy transition.