Financing a Sustainable Future

Financing a Sustainable Future

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  • Masdar, a prominent operator of solar power facilities in the UAE, intends to raise up to $1 billion through its second offering of green bonds, following a previous borrowing of $750 million earlier this year. According to the Chief Financial Officer, Niall Hannigan, the company is likely to issue more green bonds in the next six to nine months, possibly in the US, as part of its plan to secure a minimum of $3 billion for clean energy initiatives. The specific amount will depend on project requirements and the company's credit rating.
  • Masdar remains committed to green investing, despite the declining greenium trend in the US investment-grade market, driven by concerns about ESG investing. Investors are still interested in Masdar's bonds due to their adherence to the company's framework and their allocation for new renewable energy projects, such as solar, wind, and battery storage, according to Hannigan. Masdar aims to use funds raised through green bonds to support renewable energy projects in developing regions, bridging the gap in funding where it is needed most.

Why it matters

Masdar attracted investor demand exceeding $4.2 billion in its first green bond offering in July, but it did not see this green premium reflected in prices. Masdar borrows funding from institutional investors in the United States through green bonds to spend on renewable energy projects in developing countries, according to Hannigan’s statements during a panel discussion organized by the Climate Bonds Initiative on Wednesday.


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