Masdar has raised $1 billion from its second green bond, split into two $500 million tranches. Investors put in orders for 4.6 times the amount on offer. Leap records the result as a sign of strong investor confidence. Yet Masdar paid more for ten-year money than it did a year earlier, when its credit rating was lower.
Key takeaways
- Masdar raised $1 billion through its second green bond issuance, announced on 19 July 2024, split into two $500 million tranches.
- Masdar's July 2024 green bond comprises a five-year tranche with a 4.875 percent coupon and a ten-year tranche with a 5.25 percent coupon.
- The Masdar July 2024 green bond order book was oversubscribed 4.6 times, with allocation split on average 70 percent to international investors and 30 percent to investors in the Middle East and North Africa.
- Fitch rated Masdar's July 2024 green bond AA- and Moody's rated it A2, compared with A+ from Fitch and A2 from Moody's for Masdar's first green bond in July 2023.
- Masdar's first green bond, in July 2023, raised $750 million for ten years at a 4.875 percent coupon, the same coupon its July 2024 bond paid for five years.
What does Masdar's second green bond pay for?
It pays for Masdar's share of new projects, not the projects themselves. Leap records that the proceeds will fund Masdar's equity commitments on new greenfield projects, including several in developing economies. That is a specific use. An equity commitment is the portion of a project's cost that the owner funds itself, with the rest usually borrowed against the project.
A green bond is a bond whose proceeds can only be used for projects that meet a defined environmental standard. Masdar's standard is its Green Finance Framework. Leap records the eligible categories as solar, including floating and concentrated solar power; onshore and offshore wind, including floating turbines; transmission and distribution that connects renewable plants; and energy storage.
The bigger target sits behind both tranches. Masdar plans to grow its global portfolio to 100 GW by 2030. Raising money at the parent level and putting it into projects as equity is what unlocks project-level debt, so the bond's reach extends well beyond its $1 billion face value.
Why did ten-year money cost Masdar more than in 2023?
The coupon tells part of the story and the market sets the rest. In July 2023 Masdar's first green bond raised $750 million for ten years at 4.875 percent. In July 2024 the ten-year tranche paid 5.25 percent, 0.375 percentage points more. The five-year tranche paid exactly the 4.875 percent that ten-year money had cost a year earlier.
The ratings do not suggest Masdar became a weaker credit. On Fitch's measure it became a stronger one. Fitch rated the first bond A+ and the second AA-, one notch higher. Moody's rated both A2. A bond's coupon is set by the general level of interest rates at the time of issue as well as by the issuer's own risk, so a higher coupon alongside a better rating is more consistent with a shift in the wider market than with anything specific to Masdar. Leap's 2023 record gives a final spread of 115 basis points over US Treasuries; the 2024 records do not state a spread, so the two cannot be compared on that measure.
The investor base also shifted. The first bond went 87.5 percent to international investors and 12.5 percent to investors in the Middle East and North Africa. The second went 70 percent and 30 percent. Demand was lower too, at 4.6 times oversubscribed against 5.6 times for the debut. The bond still drew strong demand, but a larger share of it came from closer to home.
How far has Masdar got with its green bond programme?
Most of the way. When Masdar issued its first green bond in 2023, Leap recorded it as the first part of a programme to raise up to $3 billion of bonds to meet its equity funding commitments. The July 2024 issue brought the total to $1.75 billion.
Enerdatics records the programme's progress since. In May 2025 Masdar issued another $1 billion in two tranches: a five-year bond at 4.875 percent, again, and a ten-year bond at 5.375 percent. Leap's record of that issue puts the programme at $2.75 billion raised. Across the three issues, the five-year coupon has held at 4.875 percent while the ten-year coupon has risen from 4.875 percent to 5.25 percent and then 5.375 percent. Leap also records that Masdar raised $6 billion in non-recourse financing for more than 11 GW of projects across nine countries in 2024, which shows the scale of project debt that equity raised at the parent level is meant to support.
What does the deal signal for renewable developers raising capital?
It signals that well-capitalised developers such as Masdar, founded by Mubadala Investment Company, can keep raising green bond money at scale even as the cost of long-dated debt moves up. Masdar's second bond came in larger than its first, and its third matched the second. That kind of repeat access is a funding advantage over developers that have to raise equity project by project.
It also shows how a developer's corporate and project borrowing fit together. The first bond, covered in Masdar's $750 million debut green bond, was mostly used to repay bridge loans on projects in Uzbekistan and Azerbaijan, Enerdatics understands. Project-level debt sits alongside it, such as the euro loan Masdar raised for the Baltic Eagle offshore wind farm. The second bond is aimed at new greenfield commitments, which puts Masdar's own balance sheet behind earlier-stage projects.
The tranche structure is the detail to watch. Splitting the issue between five and ten years let Masdar keep part of its funding at the 2023 coupon. If the ten-year coupon keeps rising, more of the programme's remaining capacity could shift towards shorter maturities.
Frequently asked questions
How much did Masdar raise in its July 2024 green bond?Masdar raised $1 billion, announced on 19 July 2024, in two $500 million tranches. The five-year tranche carries a 4.875 percent coupon and the ten-year tranche a 5.25 percent coupon.
Who arranged Masdar's second green bond?The joint lead managers and bookrunners were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis and MUFG.
What is an equity commitment?An equity commitment is the share of a project's cost that its owner agrees to fund with its own money, rather than through project-level debt. Masdar's July 2024 green bond proceeds fund its equity commitments on new greenfield renewable projects.
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