Masdar lists its debut $750 million green bond on London Stock Exchange

Move is first part of the company's programme to raise up to $3 billion to meet its equity funding commitments on new renewable energy projects

Masdar lists its first green bond on the London Stock Exchange. Photo: Masdar

Abu Dhabi clean energy company Masdar on Monday 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.

“This is a defining moment for Masdar and climate finance … The demand for green bonds is extremely high and will enable investment in renewable energy projects, many of which will be in developing economies and climate-vulnerable countries,” Dr Sultan Al Jaber, Cop28 President-designate and chairman of Masdar, said in a statement on Monday.

The successful issuance of Masdar green bonds will support the aim of the tripling of global renewable energy capacity by 2030, “by helping to provide funding towards renewable energy projects where they are needed most”, added Dr Al Jaber, who is also the UAE Minister of Industry and Advanced Technology.

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. It is also targeting green hydrogen production of one million tonnes per annum by 2030.

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.

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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.

Masdar’s green bond is the first part of a programme to raise up to $3 billion to meet the company’s equity funding commitments on new renewable energy projects at home and overseas, as it seeks to grow its global portfolio of capacity.

Masdar is also planning a secondary listing of its green bond offering later this year on the Abu Dhabi Securities Exchange, the company said on Monday.

Proceeds from all bond offerings under the programme will be deployed towards the greenest projects in the renewables sector, including solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets.

The proceeds of Masdar’s debut green bond on the LSE "will support renewable energy projects ... Our markets are helping to accelerate the low-carbon transition by providing access to capital for companies, funds and governments worldwide”, said Julia Hoggett, chief executive of LSE and head of Equities, Capital Markets at the London Stock Exchange Group.

The success of Masdar’s debut green bond issuance follows the publication of Masdar's innovative Green Bonds Framework, published in March, said Mohamed Al Ramahi, chief executive of Masdar.

The move is "part of a broader programme to fund our ambitious growth plans", he said.

Updated: August 07, 2023, 2:51 PM