Masdar raises $1b through second Green Bond to fund new projects

Abu Dhabi Future Energy Company - Masdar, the UAE’s clean energy powerhouse, on Friday announced it has successfully raised $1 billion through its second green bond issuance, under its Green Finance Framework.

The announcement comes one year after the company’s first successful issuance of $750 million on the International Securities Market of the London Stock Exchange.

The issuance comprises dual tranches of $500 million each, with tenors of 5 and 10 years and coupons of 4.875 and 5.25 per cent respectively.

There was strong appetite from regional and international investors with the orderbook peaking at $4.6 billion, an oversubscription of 4.6x. Allocation was finalised with an average split of 70 per cent to international investors and 30 per cent to Mena investors.

The $1 billion proceeds from the issuance will be deployed 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.

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said, “Following the successful launch of our first green bond in 2023, our second green bond issuance for $1 billion underscores investor confidence in Masdar’s financial robustness and its sustainability credentials. 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.”

Mazin Khan, Chief Financial Officer of Masdar, 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.”

Last month, Masdar announced that it has reached a definitive agreement with GEK TERNA and other shareholders of TERNA ENERGY, with the intention to acquire initially 67 per cent of the company’s outstanding shares at completion of the transaction, subject to regulatory approvals and other conditions.

After completion of the transaction, Masdar will launch an all-cash mandatory tender offer to acquire all the remaining outstanding shares of the company with the intention of reaching 100 per cent.

The transaction and subsequent offer values TERNA ENERGY’s total equity at 2.4 billion euros ($2.57 billion) with an enterprise value of 3.2 billion euros ($3.43 billion), making it the largest ever energy transaction on the Athens Stock Exchange, and one of the largest in the European renewables market.

The deal is expected to provide significant capital investment in Greece and other European countries, supporting TERNA ENERGY’s contribution to Greece’s National Energy and Climate Plan (NECP) and the EU’s net zero by 2050 target.

The proposed acquisition demonstrates the scale and ambition of Masdar’s growth plans in the region, and further solidifies Masdar’s role as a trusted global energy transition partner to governments, investors, developers and communities across the globe.

Dr. Sultan Bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Chairman of Masdar and COP28 President, said, “Today marks a major milestone in Masdar’s strategy to expand its portfolio to 100GW of clean energy by 2030 and it will make a substantial contribution to the renewable energy capacity of Greece. As one of Europe’s biggest renewable energy transactions in 2024, this investment reflects the UAE’s clear commitment to Greece and Europe’s clean energy development and it represents another major practical step in realising one of the central goals of the UAE Consensus, to triple global renewable energy capacity by 2030.

In short, this deal underlines the smart growth opportunities of a responsible and orderly energy transition stimulating new industries, new jobs and low carbon economic development.”

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, commented, “We are injecting capital and global expertise to accelerate TERNA ENERGY’s expansion, supporting Greece’s renewable energy ambitions and extending Masdar’s global reach. As a leading European development platform, TERNA ENERGY is expected to play an important role in Masdar’s growing portfolio in Greece and Europe.We look forward to completing the transaction and starting to work with TERNA ENERGY’s leadership team to supercharge their ambitious growth plans in support of Greece’s energy transition.”

In May, Masdar along with Infinity Power, the largest African renewable energy developer, and Hassan Allam Utilities, a sustainable infrastructure focused development and investment platform, have today signed a Land Access Agreement with the Egyptian Government for the consortium’s 10GW capacity onshore wind farm in Egypt, set to be one of the largest in the world, with a project value exceeding $10 billion.

The agreement gives the Consortium access to a 3025 km2 area of land located in West Suhag, and will allow the consortium to conduct the necessary development studies to progress the project. This will include resource measurement campaigns, geotechnical and topographic surveys, in addition to the environmental studies to ensure minimal environmental impact.

WAM