Energy

Masdar chief hails ‘defining moment’ in $3bn green fund

August 7, 2023, 3:43 PM

Masdar green bond — Masdar marks the completion of its first green bond issuance at the London Stock Exchange

Proceeds of green bonds to go to renewable energy projects
UN reports annual $2.2trn investment shortfall for transition goals
Masdar has developed 20GW of renewables capacity in 40 countries

The chairman of Abu Dhabi Future Energy Company, better known as Masdar, has described the completion of its debut green bond issuance as a “defining moment”.

The $750 million 10-year senior unsecured notes are listed on the London Stock Exchange (LSE) and form the first part of a programme to raise up to $3 billion.

The aim is to meet Masdar’s equity funding commitments on new renewable energy projects at home and overseas, as it seeks to grow its global portfolio to 100GW of capacity by 2030.

Proceeds from all bond offerings under the programme will be deployed towards projects in the renewables sector, namely solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets.

Masdar also plans a secondary listing of its green bond offering later this year on the Abu Dhabi Securities Exchange, the second-largest market in the Gulf region.

The debut bond was celebrated on Monday at the LSE market opening, which was attended by Dr Sultan Al Jaber, UAE minister of industry and advanced technology, Cop28 president-designate and chairman of Masdar.

The bond, issued on July 19, was more than five times oversubscribed with strong appetite from regional and international investors.

Al Jaber said: “This is a defining moment for Masdar and climate finance.

“The demand for green bonds is extremely high and will enable investment in renewable energy projects, many of which will be in developing economies and climate-vulnerable countries.

“But there is more to do if we are to unlock finance for the energy transition to support the tripling of global renewable energy capacity by 2030.

“The successful issuance of Masdar green bonds will support this aim, by helping to provide funding towards renewable energy projects where they are needed most.”

Last month, the UN Conference on Trade and Development’s World Investment Report 2023 said developing countries, including those in the Middle East, face a combined annual $2.2 trillion investment shortfall in meeting sustainability and energy transition goals.

It added that globally an annual $4 trillion of investment is needed.

The largest gaps are in energy, water and transport infrastructure, the report noted.

Masdar has developed over 20GW of renewables capacity across more than 40 countries, has invested more than $30 billion, and is targeting a 100GW portfolio by 2030.

Masdar is jointly owned by Abu Dhabi National Oil Company, Mubadala Investment Company and Abu Dhabi National Energy Company.