A. SREENIVASA REDDY (ABU DHABI)
Fitch Ratings has affirmed Abu Dhabi Future Energy Company (Masdar)’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at “AA-” with Stable Outlook. The agency also affirmed Masdar’s Short-Term IDR at “F1+”, in line with the rating of its sponsor, Abu Dhabi.
An Issuer Default Rating is Fitch’s view of an issuer’s ability to meet its financial obligations. A foreign-currency IDR refers to obligations denominated in foreign currency, while a local-currency IDR refers to obligations denominated in local currency.
Fitch’s rating scale ranges from “AAA” at the top to “D” at the bottom. Masdar’s “AA-” rating sits near the upper end of that scale and is one notch below Abu Dhabi’s “AA” rating, reflecting Fitch’s assessment of the company’s strong links with the Abu Dhabi government.
Fitch said Masdar’s ratings reflect the scale of support from Abu Dhabi, demonstrated by substantial capital injections that the agency expects to continue.
“In our view, Masdar performs a highly strategic public mission for Abu Dhabi, which has a clear interest in ensuring Masdar’s financial stability,” Fitch said.
The agency assigned Masdar a support score of 35 points out of a maximum of 60 under its Government-Related Entities rating criteria, corresponding to a one-notch differential between Masdar’s and Abu Dhabi’s IDRs.
The rating action underlines Masdar’s status as an Abu Dhabi government-related entity, or GRE, and its close alignment with the emirate’s policy agenda. Fitch said extraordinary support from Abu Dhabi to Masdar would be “Extremely likely” in case of need, reflecting both the government’s responsibility to support the company and its incentive to do so.
Fitch said Masdar is owned by Abu Dhabi through intermediate holding companies Mamoura, Abu Dhabi National Energy Company, or TAQA, and ADNOC.
The agency said it expects the Abu Dhabi government to retain full indirect control of Masdar in the medium term, with oversight maintained through the intermediary shareholders.
The agency also highlighted Masdar’s track record of government support. It said Masdar has received consistent support, resulting in very low reliance on external debt despite the scale of its projects.
State support has included initial in-kind contributions of land, regular direct government grants and equity injections. Over the past two years, Masdar received equity injections of $5.5 billion, helping it limit leverage at the holding company level and maintain a strong underlying financial profile.
Although Fitch does not assign Masdar a Standalone Credit Profile, it said the company’s underlying financial profile is expected to be at least “bb” on a standalone basis.
Fitch said it does not assign an SCP because Masdar operates on behalf of the government for a policy-driven mission, has very tight operational and financial links with the state, and receives funding as required.
Fitch said: “Masdar is of great political importance for the government due to its central role in Abu Dhabi’s Economic Vision 2030, set up in 2009 to lead the country’s energy transition, and its high visibility among Abu Dhabi’s GREs.”
The agency added that Masdar’s investments are aimed not only at long-term returns but also at energy security.
Masdar’s mandate from the government to reach 100GW production by 2030 further reinforces its role in Abu Dhabi’s clean-energy agenda.
Fitch also said Masdar’s operating performance remains strong, with continued growth expected to deliver its policy mission. It said all projects are required to be cash-generating once operational, and that this has generally been the case so far.
The agency said Masdar increased significantly in size during 2024 through major investments in Terra-Gen and GEK TERNA, with stabilisation and integration taking place in 2025.
Fitch also affirmed the ratings on Masdar’s $3 billion EMTN programme and $2.75 billion of issuance in line with the company’s Long-Term Foreign-Currency IDR.