Masdar raises $1 billion with second green bond – SPE

Abu Dhabi Future Energy Co. (Masdar) has raised $1 billion through its second green bond issuance.

The transaction, executed under Masdar’s Green Finance Framework, includes dual tranches of $500 million each. The bonds have a term of five and ten years and have coupons of 4.875% and 5.25% respectively.

Masdar said there was “strong interest from regional and international investors” with the order book peaking at $4.6 billion, an oversubscription of 4.6 times. The final allocation saw an average distribution of 70% to international investors and 30% to investors from the Middle East and North Africa.

The joint lead managers and bookrunners for the issue were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis and MUFG.

The $1 billion investment will be used to finance equity commitments for new greenfield projects, Masdar said. The company aims for a portfolio capacity of 100 GW by 2030.

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said the result “underlines investors’ confidence in Masdar’s financial robustness and its sustainability credentials… The funds will be critical in advancing our ambitious portfolio of sustainable energy projects, further strengthening our role as a key player in supporting a just energy transition by increasing energy access in emerging markets and the Global South.”

Masdar launched its first sale of green bonds on the London Stock Exchange a year ago. It subsequently raised $750 million and the company says projects financed by the first bond are expected to reduce 5.4 million metric tons of greenhouse gas emissions annually.