The Abu Dhabi-based clean energy company Masdar has raised close to $750 million for investing in renewable energy projects. The green bond was completed through the sale of 10-year unsecured notes and was 5.6 times oversubscribed. Masdar reported that the order book peaked at $4.2 billion. The bonds will be used to invest in renewable energy projects in the UAE and abroad.
Masdar has actively invested more than $30 billion in projects in over 40 countries. Their aim is to expand their global capacity to 100 gigawatts of renewable energy by the end of the decade. The sale of this green bond highlights the confidence investors have in Masdar and in renewables. The credit ratings for the company are A2 and A+, from Moody’s and Fitch respectively. As for the final sale, 87.5 percent went to international investors, and 12.5 percent went to MENA investors.
Green Finance Framework
As per Masdar’s Green Finance Framework, the money raised from this bond will be used for investing in “dark green” renewable energy projects. These projects will primarily focus on developing economies and climate-vulnerable countries that urgently require investment. All the money raised from the bond offerings in this program will go directly to the greenest projects in the renewable energy sector. These projects include solar, wind, renewable power transmission, distribution infrastructure, and battery storage assets. Projects will be carefully chosen based on strict environmental, social, and governance (ESG) criteria to ensure their eligibility.
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“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,” Dr Sultan Al Jaber, Cop28 President-Designate and Chairman of Masdar, said.
GCC’s green funds
Several banks, including BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Societe Generale, and Standard Chartered, formed a syndicate to manage and run the sale. Green bonds have been selling fast in the GCC, as oil-rich economies look to offset their carbon footprint and meet their net-zero commitments. Just last year, the total GCC green bond issuances from 15 deals amounted to a record $8.5 billion.
Other significant green bonds have also been issued this year. In February, Saudi Arabia’s Public Investment Fund raised $5.5 billion to finance its green investments. In April, Taqa, also known as Abu Dhabi National Energy Company, debuted a green bond valued at $1 billion. The following month, Majid Al Futtaim Holding raised $500 million through its fourth green sukuk in four years.
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