Masdar Raises $1B Green Bond For Clean Energy Growth

Abu Dhabi Future Energy Company PJSC, commonly referred to as Masdar, has raised $1 billion through its third green bond offering successfully, cementing its place as a global clean energy and sustainable finance leader. The transaction, which was 6.6 times oversubscribed, is a testament to the unprecedented faith of international investors in Masdar's financial resilience and long-term strategy. With this newest issuance, the aggregate amount raised under Masdar's green bond program amounts to $2.75 billion since the inception of the program in 2023.

The new green bond came to market in two tranches of $500 million each with five and ten year maturities and coupons of 4.875% and 5.375% respectively. The bond priced at 80 and 90 basis points above US Treasuries, the lowest spreads in the history of Masdar's bond issuances, reflecting high demand and deep investor confidence. The orderbook came in strong with a substantial volume of $6.6 billion, comprising dedicated green funds along with top-tier institutional investors across the world. The distribution was such that 85% of the issuance was to international investors and 15% to regional MENA investors.

In the opinion of Mohamed Jameel Al Ramahi, Masdar CEO, the success of this third issuance is a testament to the increasing confidence the investment community has in Masdar's strong financials and its long-term clean energy expansion strategy across the world. He underlined that the bond proceeds will play a key role in financing new greenfield renewable energy projects, especially in emerging markets, where energy transformation is vital towards realizing global climate goals. Masdar has always invested all prior green bond proceeds in renewable energy infrastructure, and this latest issuance follows suit.

According to Masdar's revised Green Finance Framework, the new issuance covers not just greenfield renewable energy projects but also green hydrogen and independent battery storage solutions. This strategic expansion marks Masdar's larger intention to fund innovations and diversified technologies in the clean energy arena. Previously in April, this new framework was reiterated by Moody's with a Sustainability Quality Score of SQS1, its best rating, again confirming Masdar's dedication to sustainability and transparent application of proceeds.

Masdar's CFO, Mazin Khan, noted the successful issuance as a reaffirmation of investors' high confidence in Masdar's financial strength and strategy. He further noted that Masdar is leading the way on sustainable finance at the industrial scale, utilizing capital markets to finance a clean energy global transition. The bond has solid credit ratings of AA- by Fitch and A1 by Moody's, further boosting investor confidence in Masdar's credit standing.

This issuance is not a solitary milestone for Masdar. It comes on the heels of two previous green bond issuances—a $750 million bond in 2023 and a $1 billion issuance in early 2024—both entirely committed to the development of renewable energy projects. Furthermore, Masdar also raised $6 billion of non-recourse financing earlier this year to finance more than 11 GW of clean energy capacity in 12 projects spread across nine countries. These investments are central to Masdar's bold global ambitions, looking to substantially expand its renewable energy base, especially in high-potential and underserved emerging markets.

The joint lead managers for the recent green bond issue were First Abu Dhabi Bank, J.P. Morgan, Bank of China, and BNP Paribas, among other prominent financial institutions. Their participation underscores the deep institutional backing and high levels of credibility Masdar has in global capital markets.

Masdar's strategic emphasis on international clean energy development, particularly in high-energy-demanding markets with low access to renewable infrastructure, positions it as a vital actor in global energy transition. Through the might of sustainable finance, Masdar is not just developing energy capacity but also unlocking investment opportunities aligned with environmental, social, and governance (ESG) objectives. With the company further diversifying its green energy assets and attracting strong international investment, it reconfirms itself as a clean, sustainable, and inclusive global energy champion.