Masdar Secures $1 Billion Green Bond to Fund Renewable Energy Projects
Successful Green Bond Issuance
- Masdar has announced the successful issuance of a $1 billion green bond to fund renewable energy projects as part of its Green Finance Framework.
- The second green bond issue saw significant oversubscription, with demand reaching $4.6 billion, or 4.6 times the amount supplied.
- The issue consists of two $500 million tranches, each with a maturity of five and ten years and coupons of 4.875% and 5.25%, respectively.
- The investor base was 30% regional (MENA) and 70% foreign.
Use of Funds
- The raised funds will be used to finance greenfield projects, mostly in developing nations, with the goal of having a 100GW portfolio capacity by 2030.
- Masdar‘s first green loan in 2023 funded projects with a combined nameplate capacity of 3.7GW, which are expected to reduce greenhouse gas emissions by 5.4 million tonnes annually.
- The allocation of funds is transparent thanks to Masdar’s Green Finance Framework, which has been given a top rating of SQS-1 by Moody’s.
- The financial reports for 2023 demonstrate the effective use of funds to support projects in the Global South and emerging markets.
Evaluation and Impact
- For this second green bond offering, Masdar received an A2 rating from Moody’s and an AA- rating from Fitch, reflecting the company’s strong financial position.
- Fitch recently raised Masdar’s rating one notch to AA- with a stable outlook, indicating strong shareholder support.
- The lead managers and bookrunners for the issue were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Crédit Agricole CIB, Natixis, and MUFG.
- The funds will be used to support projects in developing nations and the Global South, as well as to increase Masdar’s capacity to produce renewable energy.
- The goal is to significantly contribute to the global energy transition by expanding access to renewable energy.
