Masdar raises another $1 billion through green bond issuance

Abu Dhabi Future Energy Company Masdar on Friday announced it has issued another $1 billion green bond, bringing the total outstanding under its green bond programme to $2.75 billion, and reinforcing the company’s global leadership position in sustainable finance.

The bond was issued in two equal tranches of $500 million, with tenors of 5 and 10 years and coupons of 4.875% and 5.375% respectively.

The bond attracted significant oversubscription with a peak orderbook of $6.6 billion, with strong demand from both regional and international investors, including dedicated green funds.

Spreads over US Treasuries landed at 80bps for the 5-year tranch and 90bps for the 10-year, representing the tightest pricing achieved on Masdar’s issuances to date. Allocation was finalised with a split of 85 per cent to international investors and 15 per cent to Mena investors.

Masdar is widely recognised as a global leader in sustainable finance, with successive green bonds of $750 million and $1 billion in 2023 and 2024, which have been fully allocated to new greenfield projects in developed and developing economies.

The company’s green bond programme is complemented by its other financing activities, which in 2024 included the issuance of $6 billion of non-recourse financing for the development of more than 11 gigawatts (GW) of clean energy capacity across 12 new projects in nine countries.

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said, “This third issuance demonstrates the continued and growing confidence the investment community places in Masdar’s financial strength and long-term vision.

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, which are often in most urgent need of investment. All proceeds from our bond programme are allocated exclusively to the development of new ‘dark green’ renewable energy projects, giving investors complete confidence as to how their money is being spent.” Mazin Khan, Chief Financial Officer of Masdar, said, “This latest green bond issuance, aligned with Masdar’s Green Finance Framework, underscores the overwhelming investor confidence in our financial resilience and strategic direction.

As we look to deliver the equitable energy system of tomorrow, Masdar is raising sustainable finance on an industrial scale to support the development of new clean energy projects, both at home and internationally, giving investors the opportunity to play their part in the green financing agenda.” Masdar updated its Green Finance Framework in March this year, with the eligibility criteria expanded to include green hydrogen and standalone battery storage projects.

Moody’s reaffirmed its Sustainability Quality Score of SQS1 (Excellent), the highest possible rating, for the updated framework in April.

In line with Masdar’s corporate credit ratings, the company’s third bond issuance was rated AA- by Fitch and A1 by Moody’s.

The joint lead managers and bookrunners on 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.

The strategic energy partnership between the UAE and the US continues to reinforce both countries’ shared vision for a sustainable future. This collaboration is marked by significant joint investments in clean and renewable energy technologies, aimed at bolstering global energy security and supporting emerging economies.

Meanwhile, a key initiative is the UAE-US Partnership for Accelerating Clean Energy (PACE), launched in November 2022, which seeks to mobilise US$100 billion in financing and investment to deploy 100GW of clean energy by 2035.

As part of this effort, the two countries announced in January 2023 a $20 billion allocation to develop 15GW of clean energy projects in the United States by 2035. The initiative is being led by Masdar in partnership with private-sector investors from the United States.

Abu Dhabi National Oil Company (ADNOC) also joined the clean energy push by acquiring a 35 per cent equity stake in ExxonMobil’s blue hydrogen project in Texas, which will be capable of producing up to 1 billion cubic feet daily of blue hydrogen, with about 98 per cent of carbon dioxide removed, and more than 1 million tonnes of low-carbon ammonia per year.

In support of innovation, the Abu Dhabi Department of Energy signed agreements with the University of Arizona and the International Renewable Energy Agency (IRENA) to explore advanced clean energy technologies, including solar power in space and climate acceleration tools.

The United States remains a core market for Masdar, which is targeting a clean energy portfolio of 25GW in the United States within a decade. Masdar’s portfolio in the US comprises wind, solar and battery storage projects in California, Texas, New York, and New Mexico, reflecting the company’s long-term commitment to transforming energy systems.

The bond attracted significant oversubscription with a peak order book of $6.6 billion, with strong demand from both regional and international investors