KHALED AL KHAWALDEH (ABU DHABI)

Masdar announced on Friday that it had raised $1 billion through its second green bond issuance, underscoring investor confidence and the company’s green finance credentials. Proceeds from the sale will go exclusively towards “greenfield” renewable projects.

The announcement comes one year after the company’s first successful issuance of $750 million on the International Securities Market of the London Stock Exchange.

“These bonds are critical for our growth; they are part of a mix of equity, debt, and internally generated cash that we use to fund our projects,” Mohammed Al Shehhi, Director of Bidding and Proposals at Masdar, told Aletihad on Friday.

“The green bond is a strategic choice that we have chosen at this stage of our growth to finance our projects.”

The bond issuance was 460% oversubscribed, with an order book of $4.6 billion, proving widely popular with investors both locally and abroad. Seventy percent of investors were international, while the rest came from the MENA region.

Masdar will aim to use its new green bond as a financing mechanism for new projects, many in emerging economies, that will help bring it closer to its 100GW aim by 2030. Proceeds from its previous bond issuance went to funding 3.7GW of capacity in emerging markets and the Global South, expected to mitigate 5.4 million tonnes in GHG emissions annually when fully operational.

“Following the successful launch of our first green bond in 2023, our second green bond issuance for $1 billion underscores investor confidence in Masdar’s financial robustness and its sustainability credentials,” Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said.

“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.”

Green finance is seeing a surge in the GCC financial space as banks and institutions look for new methods to fund an increasing inflow of new green projects. At COP28 last year, the UAE’s financial sector pledged to mobilise Dh1 trillion in sustainable finance by 2030, a goal announced by the UAE Banks Federation in line with the strategic vision of the Central Bank of the UAE.