UAE clean energy player Masdar has announced it has raised US$1bn through its second green bond issuance, under its Green Finance Framework.
The news comes a year after the company’s first successful issuance of US$750m on the International Securities Market of the London Stock Exchange.
The issuance comprises dual tranches of US$500m each, with tenors of five and 10 years and coupons of 4.875% and 5.25% respectively.
The company said there was strong appetite from regional and international investors, with the orderbook peaking at US$4.6bn, an oversubscription of 4.6x.
Allocation was finalised with an average split of 70% to international investors and 30% to MENA investors.
The $1bn proceeds from the issuance will be used 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.
Highlighting the delivery of its commitments under the company’s Green Finance Framework, which attracts the highest possible rating from Moody’s of SQS-1, Masdar’s recently published 2023 Green Finance Report detailed the allocation and impact of its debut green bond.
The proceeds have been used to fund projects in emerging markets and the Global South with 3.7GW in total nominal capacity and are expected to mitigate 5.4m tonnes in GHG emissions a year when fully operational.
In addition to the green bond program, Masdar said it is making significant acquisitions of operational companies in mature markets, injecting capital as well as bringing expertise, and making a substantial contribution to the renewable energy capacity of global markets.
“Following the successful launch of our first green bond in 2023, our second green bond issuance for $1bn underscores investor confidence in Masdar’s financial robustness and its sustainability credentials,” said Masdar chief executive officer Mohamed Jameel Al Ramahi.
“The funds will be pivotal in advancing our ambitious portfolio of renewable energy projects, further cementing our role as a key player in supporting an equitable energy transition by increasing energy access in emerging markets and the Global South.”
Masdar chief financial officer Mazin Khan added: “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.
“This is an important component of our investor relations story, but it is also a commitment that we are transparently fulfilling through the publication of our audited annual allocation and impact reporting.
“Few companies as strongly rated as Masdar offer investors bonds that can make such a positive impact across the ESG spectrum. Even fewer companies can tell investors exactly where every dollar of their money is going and its impact.”
In line with Masdar’s corporate credit ratings, this second issuance was rated AA- by Fitch and A2 by Moody’s.
Fitch recently upgraded Masdar’s credit rating one notch to ‘AA-‘, stable outlook, recognising the company’s financial strength and the support from its shareholders, the latter evidenced by their significant contributions to fund Masdar’s growth ambitions.
The joint lead managers and bookrunners on the issuance were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis and MUFG.