Masdar has sold its first green bond and raised $750 million. The stated purpose is broad: funding its renewable energy expansion at home and abroad. The record of where the money goes is much narrower. Most of it lands in two former Soviet republics, and Enerdatics understands that two thirds of it pays back loans Masdar has already drawn.
Key takeaways
- Masdar completed its first green bond issuance on 19 July 2023, raising $750 million at a coupon of 4.875 percent with a 10-year maturity, as the first part of a programme to raise up to $3 billion.
- Masdar's debut green bond was oversubscribed 5.6 times, with pricing tightening by 35 basis points between launch and final terms to land at a spread of 115 basis points over US Treasuries.
- Allocation of Masdar's first green bond was 87.5 percent to international investors and 12.5 percent to investors in the Middle East and North Africa, with credit ratings of A2 from Moody's and A+ from Fitch.
- Enerdatics understands that $500 million of the proceeds will repay two $250 million bridge loans for a solar project in Azerbaijan and a 500 MW wind project in Uzbekistan, with the remaining $250 million going to three solar projects in Uzbekistan.
- The bond was listed on the London Stock Exchange in August 2023, and Leap records Masdar raising a further $1 billion in two $500 million green bond tranches in July 2024.
Where is the first $750 million going?
Enerdatics understands the money splits into two parts. $500 million repays two bridge loans of $250 million each. A bridge loan is short-term debt taken to cover a funding need until permanent capital arrives. One bridge funded a solar project in Azerbaijan, described in that part of the record as 200 MW. The other funded a 500 MW wind project in Uzbekistan.
The remaining $250 million goes to three solar projects in Uzbekistan that were close to financial close at the time. Financial close is the point at which all funding for a project is committed and construction money can be drawn.
The assets named in the record make the map specific:
- Sherabad Solar, 457 MW, in Surkhandarya, Uzbekistan, with construction expected to start in the second half of 2023 and operations in 2024.
- Samarkand Solar, 1,000 MW, in Samarkand, Uzbekistan, with commercial operation expected in 2027.
- Jizzakh Solar, 220 MW, in Djizzakh, Uzbekistan, with construction from the second half of 2023 and operations in 2024.
- Zarafshan Wind, 500 MW, in Zarafshon, Uzbekistan, developed by Masdar with operations expected in 2024.
- Garadagh (Area 60) Solar, listed at 230 MW, in Alat, Azerbaijan, selling power to state utility Azerenerji with operations expected in 2023.
Why fund equity with a bond rather than project loans?
Because project loans and the bond pay for different slices of the same projects. Each of these plants carries its own project debt, much of it from development banks. What the bond funds is Masdar's equity commitment, the share of each project's cost the owner must put in itself before lenders will advance theirs.
The record states this directly for the programme as a whole: the up to $3 billion of bonds are to meet Masdar's equity funding commitments on new renewable energy projects at home and overseas. A corporate bond lets Masdar raise that equity once, at its own credit rating, rather than finding it project by project.
The bridge loans appear to fit the same pattern. Masdar seems to have borrowed short-term to put its equity into the Azerbaijan and Uzbekistan projects on time, then replaced that short-term borrowing with 10-year money once the bond market was open to it. The 4.875 percent coupon and the 5.6 times order book are the price and the proof of that refinancing.
What did investors pay for Masdar's credit?
A spread of 115 basis points over US Treasuries for 10-year paper. A basis point is one hundredth of a percentage point, so investors accepted a yield 1.15 percentage points above the US government's. The spread tightened by 35 basis points between launch and final terms, which happens when demand outruns the amount on offer.
Investor mix tells the same story. Seven in eight bonds went to international investors rather than the home region. For a debut issuer, that matters, because it shows demand came from well beyond the home market. BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Societe Generale and Standard Chartered were joint lead managers and bookrunners.
Enerdatics records 12 financings with Masdar as a named company between January 2022 and December 2024. The earlier ones match the bond's map closely: European Bank for Reconstruction and Development loans of $51 million for Area 60 in Azerbaijan in May 2022 and of $52 million and $22 million for Zarafshan Wind in September 2022, and $396.4 million in April 2023 from a group of development banks for Sherabad, Samarkand and Jizzakh. The bond sat on top of that project debt as the equity layer. If the July 2024 tranches count towards the same programme, Masdar had raised $1.75 billion of the $3 billion by then, through the first $750 million and two further $500 million tranches.
What does the bond signal for Masdar's expansion?
It signals that Masdar intends to fund growth as a rated corporate issuer, not only as an arm of a sovereign investor. The record names the targets: acquisitions in the US, expansion in Europe and Gulf Arab countries, and a goal of 100 GW of capacity by 2030 from a portfolio of over 25 GW.
The second issue shows the programme working. The July 2024 tranches priced at 4.875 percent over five years and 5.25 percent over ten, with Fitch rating them AA-, a notch above the A+ on the debut bond. The order book was 4.6 times covered.
The European side followed fast. Days after the debut bond, Masdar agreed to buy 49 percent of Iberdrola's 476 MW Baltic Eagle offshore wind farm in Germany, covered in Enerdatics' analysis of the valuation behind Masdar's Baltic Eagle stake. The same partnership later extended to the UK, set out in Enerdatics' coverage of Masdar's investment in East Anglia 3.
Frequently asked questions
How much did Masdar raise in its first green bond?Masdar raised $750 million in July 2023 through a 10-year green bond with a 4.875 percent coupon. It was the first issue in a programme to raise up to $3 billion.
What will Masdar's first green bond fund?Enerdatics understands that $500 million repays two $250 million bridge loans for a solar project in Azerbaijan and a 500 MW wind project in Uzbekistan, and $250 million funds three solar projects in Uzbekistan.
How was Masdar's debut green bond received?The bond was oversubscribed 5.6 times, pricing tightened by 35 basis points to a spread of 115 basis points over US Treasuries, and 87.5 percent was allocated to international investors.
Ready to get deal-ready answers in seconds? Try Enerdatics Leap AI and access verified intelligence across M&A, financings, PPAs, projects, and energy market developments through natural language.
.jpeg)
