UAE’s Masdar targets $750m bond sale

The biggest renewable energy producer in the UAE plans to raise as much as $750m in its first ever green bond sale to fund new solar, wind and hydrogen projects around the world.

Masdar will likely sell the bonds in the second half of the year, chief financial officer Niall Hannigan said in an interview in Abu Dhabi. The firm plans to grow its renewables capacity five-fold by the end of the decade.

“Given the growth ambitions we have as a business and the pipeline we have in place, I would be expecting that we’re likely to be an annual issuer,” Hannigan said on the sidelines of Abu Dhabi Sustainability Week, the emirate’s annual conference for renewables, water and climate change.

The fresh funds will help the government-owned company to continue to develop new projects at home, in Saudi Arabia, central Asia and other markets. It will also seek to combine solar and wind assets with green hydrogen projects in markets like Egypt and Oman and other areas with export and transport connections. It has a green capacity target of as much as 100 gigawatts by the end of the decade.

“We’re exploring,” he said of the company’s efforts to develop hydrogen projects. “It’s a very nascent sector and it is very early days for a lot of this.”

The UAE is hosting COP28, the UN’s major annual climate change conference, this year and its most important, and arguably most difficult, task is to get the biggest oil producers more involved in the discussions on how to curb global warming.

The country was the first in the region to declare a target of net zero carbon emissions by 2050. Government-owned Abu Dhabi National Oil Company is earmarking 10 per cent of its $150bn budget for low-carbon energy projects over the next five years, in addition to Masdar’s green plans.

Masdar will also look to mergers and acquisitions to help meet its ambitious growth target, Hannigan said.

“M&A is obviously and should be a significant part of our growth strategy,” he said, adding that the US is “an increasingly attractive market.”

The UAE is leaning on its oil wealth, bolstered by crude prices that averaged almost $100 a barrel last year, to attract foreign capital to the country. Selling bonds in state-linked firms has helped raise the funds to move the UAE’s economy further away from reliance on oil sales.

Equity markets in Abu Dhabi, UAE business hub Dubai and neighboring Saudi Arabia have been one bright spot for bankers over the past year as state companies went public in a Middle East boom.

Read: Masdar City, MBZUAI, The Catalyst to promote clean energy and tech, AI in the region