UAE’s Masdar raises $750m through first green bond sale

The company will use the funds for new renewable energy projects

Masdar's green bond sale, which will help fund renewable energy projects, garnered interest from international and Mena investors. Photo: Masdar

Abu Dhabi clean energy company Masdar has raised $750 million through the sale of 10-year senior unsecured notes that will help it fund renewable energy projects.

The green bond was 5.6-times oversubscribed, with the order book peaking at $4.2 billion, Masdar said in a statement on Wednesday.

This issuance, which garnered interest from international and Mena investors, is part of a programme to raise up to $3 billion of bonds to meet Masdar’s equity funding commitments on new renewable energy projects in the UAE and overseas, the company said.

“It is vital to make finance more available, accessible and affordable for developing economies if we have any chance of meeting climate goals to supercharge sustainable development,” said Dr Sultan Al Jaber, Cop28 President-designate.

“Ahead of the UAE hosting the UN climate change conference, Cop28, we must champion initiatives that advance climate finance and decarbonisation,” said Dr Al Jaber, also UAE Minister of Industry and Advanced Technology.

Dr Al Jaber, who's also the chairman of Masdar, said the issuance of the company’s green bonds supported these twin aims by helping providing funding towards renewable energy projects.

The sale involved a syndicate of joint lead managers and bookrunners, including BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Societe Generale and Standard Chartered, Masdar said.

Masdar aims to expand its capacity to at least 100 gigawatts of renewable energy by the end of the decade. The company is active in more than 40 countries and has invested in or committed investments to projects worth more than $30 billion.

“The success of this debut green bond issuance is testament to the pioneering spirit of all the people who have worked incredibly hard over the last 17 years to grow Masdar into one of the world’s leading renewable energy companies,” said Mohamed Al Ramahi, Masdar’s chief executive.

“We look forward to the involvement of many top class investors in our journey towards delivering renewable energy and accelerating the net-zero transition around the globe.”

The market for green and sustainable bonds and sukuk is booming, specifically in GCC economies, as governments in the oil-rich economic bloc push to meet their net-zero commitments.

Total GCC green and sustainable bond and sukuk issuances last year reached a record $8.5 billion from 15 deals, compared with $605 million from six deals in 2021, amid increased participation from banks and government-related entities, data from Bloomberg’s Capital Markets League Tables showed.

In April, Abu Dhabi National Energy Company, better known as Taqa, raised $1 billion from its debut green bond, net proceeds of which will be used for financing, refinance and investment in green projects.

In May, Majid Al Futtaim Holding, one of Dubai's biggest private sector companies and the Middle East's largest mall operator, raised $500 million through a green sukuk, its fourth in about four years.

The same month, Aldar Investment Properties, the real estate management unit of the emirate’s largest listed developer, Aldar Properties, also raised $500 million through its debut green sukuk to fund acquisitions and meet its sustainability goals.

Dubai Islamic Bank, the UAE’s biggest Sharia-compliant lender by assets, also raised $1 billion from its second sustainable sukuk earlier this year.

In February, Saudi Arabia’s Public Investment Fund raised $5.5 billion through the sale of a green bond, as the kingdom’s sovereign wealth continues to finance or refinance its green investments.