Renewable Energy Finance: Masdar launches its first green bond, raises $750mn to fund its global renewable expansion

published on 21 July 2023

Financing details: The company successfully issued bonds with a coupon rate of 4.875% and a 10-year maturity. The notes were oversubscribed by 5.6 times, with strong demand from international investors, accounting for ~87.5% of the bonds. This financing marks the initial step of their $3bn bond issuance program, primarily aimed at expanding their renewable portfolio in the UAE and international markets. The issuance closely follows ACWA Power's $2.2bn financing for its 2.6 GW Al Shuaibah solar project portfolio in Saudi Arabia.  

Use of proceeds: The bond program aligns with the company's ambitious objective of reaching 100 GW of installed capacity by 2030. To achieve this target, the company is actively expanding its international presence, in addition to its focus on central Asia. 

– Central Asia: The proceeds from the current bond issuance will be utilized to repay two bridge loans, each valued at $250mn. These loans were obtained to support a 200 MW solar PV project in Azerbaijan and a 500 MW offshore wind project in Uzbekistan. Additionally, $250mn will be allocated to fund three solar projects in Uzbekistan, which are expected to reach financial close in the near future. This strategic financial move will bring the company closer to realizing its aggressive capacity target.

– North America: Masdar is actively expanding its operations beyond central Asia, with a particular focus on North America. Recent reports suggest that the company is engaging in discussions with potential acquisition targets in the United States. Masdar plans to capitalize on the recent inter-governmental agreement between the United Arab Emirates (UAE) and the US, which has set aside ~$20bn for financing 15 GW of clean energy projects in the US by 2035. This strategic partnership is expected to accelerate Masdar's growth in the region significantly.

Demonstrating their commitment to this expansion, Masdar has already taken significant steps in the US market. Recently, they acquired a stake in the 168 MW Big Beau solar plus storage project in California from EDF Renewables, further reinforcing their presence in the US clean energy sector.

– Europe: Furthermore, Masdar has recently entered into a collaboration with Iberdrola to explore potential opportunities on the continent, signaling its strategic focus on expanding its presence in the region. Additionally, Masdar has ambitious plans to invest approximately $1.2 billion in the United Kingdom's battery storage sector, leveraging its newly acquired platform, Arlington Energy.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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