Masdar issues $1bn green bond, brings total programme to $2.75bn

Abu Dhabi Future Energy Company – Masdar – has issued a new $1bngreen bond, boosting its total outstanding under the green bond programme to $2.75bn.

The latest issuance was structured in two equal tranches of $500m, with tenors of five and 10 years and respective coupon rates of 4.875 per cent and 5.375 per cent.

The offering drew robust investor interest, with a peak orderbook of $6.6bn, significantly oversubscribed by both regional and international investors, including dedicated green funds.

Spreads over US Treasuries were finalised at 80 basis points for the 5-year tranche and 90 basis points for the 10-year, marking the tightest pricing the company has achieved to date.

Allocation was split 85 per cent to international investors and 15 per cent to investors in the MENA region.

Third issuance to fund portfolio capacity targets, says Masdar CEO

“This third issuance demonstrates the continued and growing confidence the investment community places in Masdar’s financial strength and long-term vision,” said Mohamed Jameel Al Ramahi, CEO of Masdar. “The funds raised will be critical in Masdar achieving its portfolio capacity targets and will enable us to support energy transformation across the globe, especially in emerging markets and developing economies… giving investors complete confidence as to how their money is being spent.”

The company previously issued green bonds of $750m and $1bn in 2023 and 2024 respectively.

All proceeds from its green bond programme are allocated exclusively to new “dark green” renewable energy projects in both developed and developing economies.

Read: Masdar raises $1bn through second green bond issuance

In 2024, Masdar also secured $6bn in non-recourse financing to develop more than 11 gigawatts (GW) of clean energy capacity across 12 new projects in nine countries.

“This latest green bond issuance, aligned with our Green Finance Framework, underscores the overwhelming investor confidence in our financial resilience and strategic direction,” said Mazin Khan, CFO of Masdar. “Masdar is raising sustainable finance on an industrial scale… giving investors the opportunity to play their part in the green financing agenda.”

Green Finance Framework update in 2024

The clean energy giant updated its Green Finance Framework in March 2024, expanding eligible categories to include green hydrogen and standalone battery storage projects. In April, Moody’s reaffirmed the framework’s top-tier Sustainability Quality Score of SQS1 (Excellent).

The bond was rated AA- by Fitch and A1 by Moody’s, in line with its corporate credit ratings.

Joint lead managers and bookrunners for the issuance were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, J.P. Morgan, ING, Intesa Sanpaolo, Bank of China, DBS Bank, BNP Paribas and Crédit Agricole.