United Arab Emirates (UAE)-based renewable energy company Masdar has raised $1bn via the issuance of a second green bond under its Green Finance Framework.

Proceeds from the bond issuance are earmarked to fund the company’s equity commitments on new greenfield renewable energy projects, particularly in developing economies.

This comes one year after the company’s inaugural $750m issuance on the London Stock Exchange’s International Securities Market.

The latest bond issuance is structured in dual tranches, each worth $500m, with tenors of five and ten years and coupons of 4.875% and 5.25% respectively.

The offering has attracted significant interest from regional and international investors, with the order book rising to $4.6bn, indicating an oversubscription multiplier rate of 4.6.

The second green bond issuance saw a 70% investment from international investors and 30% from investors in the Middle East and North Africa (MENA) region.

The funded projects, primarily located in emerging markets and the Global South, have a combined nominal capacity of 3.7GW and are projected to reduce greenhouse gas emissions by 5.4 million tonnes annually upon full operation.

The company’s strategy extends beyond the green bond programme and acquires operational companies in mature markets.

These acquisitions involve capital injection and the transfer of expertise, significantly boosting the renewable energy capacity in these markets.

The joint lead managers and bookrunners for the bond issuance included the Abu Dhabi Commercial Bank, Citibank, HSBC, First Abu Dhabi Bank and Standard Chartered.

With plans to raise $3bn through green bonds, Masdar aims to expand its renewable energy portfolio to 100GW by 2030.

Established in 2006, Masdar’s global footprint spans 40 countries, with a commitment to increase its renewable energy portfolio and become a leading producer of green hydrogen by 2030.

Masdar CEO Mohamed Jameel Al Ramahi stated: “Following the successful launch of our first green bond in 2023, our second green bond issuance for $1bn underscores investor confidence in Masdar’s financial robustness and its sustainability credentials.

“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.”

In June 2024, Masdar agreed with GEK Terna and other Terna Energy shareholders to buy 67% of Terna Energy’s outstanding shares.