Abu Dhabi's Taqa lists dual-tranche bonds worth $1.5bn on ADX

Green finance and decarbonisation projects are key growth opportunities for national energy company

The Taqa display at World Future Energy Summit at Adnec. Victor Besa / The National
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Abu Dhabi National Energy Company, better known as Taqa, has made a secondary listing of dual-tranche bonds valued at $1.5 billion on the Abu Dhabi Securities Exchange as its looks to diversify its funding sources.

The 10-year $1 billion tranche of senior unsecured notes, Taqa's first green bond, matures in April 2033 and carries a coupon of 4.696 per cent. The five-year tranche of $500 million, maturing in January 2029, was issued as conventional bonds at a coupon rate of 4.375 per cent, the ADX said on Thursday.

In April, Taqa raised an aggregate $1.5 billion through dual tranche bond issuances. The aggregate order book of both convention and green bond issuances reached almost $15 billion, as the deal was about 10 times oversubscribed, the company said at the time.

“Taqa’s sizeable secondary bond listing on ADX reflects our ongoing and successful efforts to increase the number of listings across our growing debt market,” said Abdulla Al Nuaimi, ADX chief executive.

“This listing also demonstrates the increasing prevalence of bonds that have witnessed a sharp rise with numerous ADX-listed companies issuing green bonds.”

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.

Green bond issuance in the Middle East has also reached new highs this year, at $13 billion so far, S&P Global ratings said in a report this week.

Last month, Abu Dhabi clean energy company Masdar listed its first green bond on the London Stock Exchange to fund its new clean energy projects.

Masdar completed its issuance for the $750 million green bond offering on July 19 through the sale of 10-year senior unsecured notes. The offering was 5.6 times oversubscribed, with the order book peaking at $4.2 billion, following strong appetite from regional and international investors.

In April, Taqa, among the largest integrated utilities in the Europe, Middle East and Africa region, launched its green finance framework for the issuance of green bonds, sukuks, loans and other debt instruments to support its net-zero goal.

The company plans to use proceeds from such deals for “eligible green projects”, including renewable energy, energy efficiency, sustainable water and wastewater management, clean transportation, and terrestrial and aquatic biodiversity, it said at the time.

“Taqa is pleased to announce the secondary listing of our dual-tranche bonds onto the Abu Dhabi debt market in partnership with ADX, including our first Taqa-issued green bond,” said Jasim Thabet, Taqa’s group chief executive and managing director.

“As a low-carbon power and water champion, we see green finance and decarbonisation projects as key growth opportunities for our business driven by local and international investors’ growing demand for credible green investments."

The company reported a 5 per cent rise in its second-quarter revenue, boosted by higher demand in its transmission and distribution business.

Taqa’s revenue grew to Dh13.67 billion ($3.72 billion) in the three months ending on June 30, the company said.

Net income attributable to shareholders in the second quarter fell to Dh1.92 billion, from Dh2.31 billion in the same period a year earlier.

Updated: September 07, 2023, 11:43 AM