Masdar Secures USD 1 Billion to Expand Global Renewable Energy Projects
The USD 1 billion proceeds that will be generated from the issuance will be deployed to fund Masdar’s equity commitments on new greenfield projects, several of which are in developing states, as the company seeks to develop a total portfolio of 100 GW by 2030.
July 23, 2024. By News Bureau
The issuance includes two equal issues, each in the amount of USD 500 million, with term of 5 and 10 years and the coupons of 4.875 percent and 5.25 percent, respectively.
The availability and demand for funds for infrastructure projects from regional and international investors were buoyant; hence, the orderbook hit a record of USD 4.6 billion, an oversubscription of 4.6x. The allocation was completed with a 70:30 distribution in favour of international investors and the remaining 30 percent to MENA investors.
The USD 1 billion proceeds that will be generated from the issuance will be deployed to fund Masdar’s equity commitments on new greenfield projects, several of which are in developing states, as the company seeks to develop a total portfolio of 100 GW by 2030.
Masdar’s recently published 2023 Green Finance Report detailed the allocation and effectiveness of the company’s initial green bond. The report also highlighted the delivery of its commitments under the company’s Green Finance Framework, which attracts the highest possible rating from Moody’s of SQS-1.
The proceeds have been used to the fund operating activities across the emerging markets and the Global South, with 3.7 GW in total nominal capacity. The said funding is expected to mitigate 5.4 million tonnes of GHG emissions annually when fully operational. Besides, the green bond programme, Masdar is also diversifying its portfolio by investing equally in acquiring operational companies that are already established in mature markets; besides providing capital, the firm also offers technical knowledge and makes a substantial contribution to the renewable energy capacity of global markets.
Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said, “Following the successful launch of our first green bond in 2023, our second green bond issuance for USD 1 billion underscores investor confidence in Masdar’s financial robustness and its sustainability credentials. The funds will be pivotal in advancing our ambitious portfolio of renewable energy projects, further cementing our role as a key player in supporting an equitable energy transition by increasing energy access in emerging markets and the Global South.”
Mazin Khan, Chief Financial Officer of Masdar, said, “As we have committed under our Green Finance Framework, we are raising green bonds and other green finance instruments to invest in new dark green projects. This is an important component of our investor relations story, but it is also a commitment that we are transparently fulfilling through the publication of our audited annual allocation and impact reporting. Few companies as strongly rated as Masdar offer investors bonds that can make such a positive impact across the ESG spectrum. Even fewer companies can tell investors exactly where every dollar of their money is going and its impact.”
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