UAE state-owned renewable energy company Masdar has raised US$1 billion in financing to support the development of new clean energy projects, as the company looks to expand its renewable power portfolio to 100GW by the end of the decade.
The money will be delivered through two green bonds of US$500 million each, with tenors of five and ten years and coupons of 4.875% and 5.25%, respectively. The company noted that the money would be used to develop new greenfield renewable energy projects.
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Masdar noted that the request for financing was significantly oversubscribed, with investors pledging up to US$4.6 billion, suggesting that there is significant interest in expanding the company’s renewable power portfolio. The company currently has 21GW of renewable power capacity in operation, under construction and committed in new utility-scale projects, alongside a further 10GW in what Masdar calls “various stages of development”.
“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,” said Masdar CEO Mohamed Jameel Al Ramahi.
The latest round of financing follows the company’s raising of US$750 million last year in a separate green bond. Earlier this month, the company published the results of this financing in its 2023 Green Finance Report, which notes that the money will go towards the development of seven renewable projects, with a total capacity of 3.7GW.
Two of these projects are the 220MW Jizzakh and Samarkand PV projects in Uzbekistan, which Masdar commissioned earlier this year. While the company has not specified how the latest round of green bond financing will be deployed, its commitment to new solar developments has been clear, with solar projects accounting for five of the seven projects financed by the 2023 bond, alongside a solar-plus-storage facility.
The 2023 bond was also oversubscribed, with investors looking to commit 5.6 times the target figure to the bond, marking two consecutive years that Masdar has seen its green bond offerings significantly oversubscribed. Masdar also noted that its latest US$1 billion bond has an increasingly local composition, with 30% of its investors based in the Middle East and North Africa, compared to just 12.5% for the previous year’s bond.
Investors and developers are increasingly keen to use green bonds to support new clean power projects, with members of the Climate Bonds Initiative telling PV Tech Premium earlier this year that sustainable finance will need to become a market worth around US$5 trillion annually by the end of the decade.
