Energy

Masdar raises US$1bn through its second green bond issuance, advancing renewable projects in developing economies and aiming for 100GW by 2030. (Image source: Masdar)

Abu Dhabi Future Energy Company PJSC – Masdar, the UAE’s clean energy leader, has successfully raised US$1bn through its second green bond issuance under its Green Finance Framework

This comes a year after the company’s first issuance of US$750mn on the International Securities Market of the London Stock Exchange.

The issuance consists of two tranches of US$500mn each, with tenors of five and ten years and coupons of 4.875% and 5.25% respectively. There was strong demand from regional and international investors, with the order book reaching US$4.6bn, an oversubscription of 4.6 times. The final allocation split was approximately 70% to international investors and 30% to MENA investors.

Empowering green futures

The US$1bn proceeds from the issuance will fund Masdar’s equity commitments on new greenfield projects, many in developing economies, as the company aims for a target portfolio capacity of 100GW by 2030.

Masdar’s 2023 Green Finance Report, highlighting the delivery of its commitments under the Green Finance Framework, which has the highest possible rating from Moody’s of SQS-1, detailed the allocation and impact of its debut green bond. The proceeds have funded projects in emerging markets and the Global South with a total nominal capacity of 3.7 GW and are expected to mitigate 5.4 million tonnes of GHG emissions annually when fully operational.

Besides the green bond program, Masdar is acquiring operational companies in mature markets, injecting capital and expertise, significantly contributing to the global renewable energy capacity.

Mohamed Jameel Al Ramahi, CEO of Masdar, stated, “Following the successful launch of our first green bond in 2023, our second green bond issuance for US$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.”

Mazin Khan, chief financial officer of Masdar, added, “As we have committed under our Green Finance Framework, we are raising green bonds and other green finance instruments to invest in new dark green projects. This is an important component of our investor relations story, but it is also a commitment that we are transparently fulfilling through the publication of our audited annual allocation and impact reporting. Few companies as strongly rated as Masdar offer investors bonds that can make such a positive impact across the ESG spectrum. Even fewer companies can tell investors exactly where every dollar of their money is going and its impact.”

Aligned with Masdar’s corporate credit ratings, this second issuance was rated AA- by Fitch and A2 by Moody’s. Fitch recently upgraded Masdar's credit rating to 'AA-', with a stable outlook, recognising the company’s financial strength and shareholder support, evidenced by their significant contributions to fund Masdar's growth ambitions.

The joint lead managers and bookrunners for the issuance were First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Standard Chartered, Credit Agricole CIB, Natixis, and MUFG.

Envision Energy partners with Saudi PIF and Vision Industries to advance wind power in the Middle East, supporting sustainability goals. (Image source: Envision Energy)

Envision Energy, recognised as the "Green Giant" among the "2024 TIME100 Most Influential Companies," has announced a strategic joint venture (JV) with Saudi Arabia's Public Investment Fund (PIF) and Vision Industries

This venture aims to accelerate wind power growth across the Middle East, supporting the region's transition to a cleaner, more sustainable future.

Under the agreement, Envision Energy will hold the majority share in the JV, with PIF and Vision Industries holding the remainder. The focus will be on manufacturing and assembling wind turbines and components like blades, nacelles, and hubs. This initiative aligns with Saudi Arabia's ambitious goal to localize 75% of renewable energy components by 2030, as part of the National Renewable Energy Program led by the Saudi Ministry of Energy.

PIF, as one of the world's largest sovereign wealth funds, plays a pivotal role in Saudi Arabia's energy transformation strategy, investing in various renewable energy initiatives including wind power, photovoltaics, hydrogen, and energy storage. Vision Industries, known for its investment in green energy projects and local supply chains, brings valuable expertise to the JV.

Envision Energy was chosen for its leadership in green power technologies, including smart wind power, energy storage systems, and green hydrogen solutions. The company has been a top player in global wind power order intake for consecutive years, contributing significantly to the worldwide energy transition.

This partnership underscores international cooperation and a shared vision for advancing clean energy transitions globally. The ceremony announcing the JV was attended by key figures including H.E. Yasir Othman Al-Rumayyan, Governor of PIF, Lei Zhang, chairman of Envision, and board members of Vision Industries, highlighting the commitment to sustainable development and Saudi Arabia's Vision 2030 objectives.

IRENA warns of missing renewables target despite growth surge; global collaboration crucial for sustainable energy future. (Image source: IRENA)

The Renewable Energy Statistics 2024, released by the International Renewable Energy Agency (IRENA), highlight a critical challenge: While renewables are the fastest-growing power source, the world faces a potential shortfall in meeting the tripling renewables target pledged at COP28

To stay on track, the world will now need to increase renewables capacity by at least 16.4% annually through 2030.

The unprecedented 14% increase in renewables capacity during 2023 has established a compound annual growth rate of 10% from 2017 to 2023. Coupled with the declining additions of non-renewable capacity over the years, this trend suggests that renewable energy is on course to surpass fossil fuels in global installed power capacity.

However, if last year’s 14% growth rate continues, IRENA's target of reaching 11.2 Terawatts (TW) by 2030 under its 1.5°C Scenario will fall short by 1.5 TW, missing the target by 13.5%. Moreover, if the world maintains the historical annual growth rate of 10%, it will only achieve 7.5 TW of renewables capacity by 2030, falling short of the target by nearly one-third.

IRENA director-general Francesco La Camera emphasised, “Renewable energy has been increasingly outperforming fossil fuels, but it is not the time to be complacent. Renewables must grow at higher speed and scale. Our new report sheds light on the direction of travel; if we continue with the current growth rate, we will only face failure in reaching the tripling renewables target agreed in the UAE Consensus at COP28, consequently risking the goals of the Paris Agreement and 2030 Agenda for Sustainable Development.”

“Consolidated global figures conceal ongoing patterns of concentration in geography. These patterns threaten to exacerbate the decarbonisation divide and pose a significant barrier to achieving the tripling target,” he added.

COP28 president Dr Sultan Al Jaber stated, “That means increasing collaboration between governments, the private sector, multilateral organisations, and civil society. Governments need to set explicit renewable energy targets, look at actions like accelerating permitting and expanding grid connections, and implement smart policies that push industries to step up and incentivise the private sector to invest. Additionally, this moment provides a significant opportunity to add strong national energy targets in NDCs to support the global goal of keeping the 1.5°C target within reach. Above all, we must change the narrative that climate investment is a burden to it being an unprecedented opportunity for shared socio-economic development.”

Regarding power generation, the latest data for 2022 confirmed regional disparities in renewables deployment. Asia remains the global leader in renewable power generation with 3,749 Terawatt hours (TWh), followed for the first time by North America (1,493 TWh). South America saw a notable increase in renewable power generation by nearly 12% to 940 TWh, attributed to hydropower recovery and increased solar energy contribution.

Africa experienced a modest growth of 3.5%, reaching 205 TWh in renewable power generation for 2022, despite its substantial potential and urgent need for sustainable growth. Recognising this need, IRENA is advancing the Accelerated Partnership for Renewables in Africa (APRA) initiative and preparing an investment forum focused on APRA member countries later this year.

The UAE leads in environmental sustainability and climate action across the Gulf and Africa, says Agility Global report, highlighting key initiatives and invest. (Image source: Adobe Stock)

The United Arab Emirates remains the leader, by most key measures, in environmental sustainability and climate action across the Gulf and Africa, says a new Agility Global report that tracks government and business policies, practices and investment related to the environment 

The findings, released Wednesday, are contained in a report that updates Agility’s Middle East and Africa Environmental Sustainability Scorecard, issued last November. The Scorecard examined the performance of 17 MEA countries in environmental sustainability outcomes, government policies and corporate practices. South Africa and the UAE led as the top performing countries in their respective regions and overall.

“The UAE shows strong collaboration between the government and private sectors in implementing its environmental sustainability agenda,” the report says. “While further progress is needed in areas such as green finance, lowering barriers to entry in the energy market, and filling remaining regulatory gaps, the country is well positioned to enhance its regional leadership role.”

UAE's green investment initiative

The report noted the country’s leadership in green hydrogen pilot projects, and highlighted its sustainability startup accelerator, Catalyst. It also cites UAE government estimates that the green energy transition could attract US$163.5bn in fresh investment in renewables and clean energy while boosting exports by US$6.8bn and generating 160,000 new jobs in the Emirates.

Agility Global chairman, Tarek Sultan, said, “The UAE is becoming a global leader in sustainability by demonstrating the seriousness of its commitment to clean energy, green infrastructure and climate financing assistance for developing countries. Its US$54bn pledge towards investing in renewables by 2030 and US$30bn commitment to assisting developing countries in making the clean energy transition are notable. We believe that the scope and scale of the Emirates’ sustainability agenda will generate green-growth opportunities for future-minded investors and businesses.”

The UAE report builds on the results of the 17-country Scorecard, which described MEA nations as “relative late comers to global sustainable development” but said they “are rapidly stepping-up their sustainability strategies, programs and investments.”

The Scorecard used 48 performance and progress indicators to assess performance and compare countries. The indicators include data, regulatory frameworks, policy assessments, incentives and corporate practices across six pillar areas: green investment and technology; sustainable infrastructure and transport; governance and reporting; energy transition; environmental ecosystems; and circularity.

Last fall, roughly two-thirds of UAE business people surveyed for the Scorecard said climate change affects their business operations; and half said their companies would allocate 5% to 20% of capital expenditure toward achieving environmental sustainability targets.

The UAE report was commissioned by Agility Global, a multi-business owner and operator and investor, listed on the Abu Dhabi Securities Exchange (ADX). It was compiled by Horizon Group, a Geneva-based firm that specialises in research and analysis for international organisations, governments and leading businesses.

At COP28, Agility joined 13 other businesses to form the World Economic Forum’s leaders for a Sustainable MENA, pledging to address climate change in a region where only 12% of MENA businesses have set a net-zero target. Two of Agility Global’s three largest operating businesses (Menzies and Tristar) have committed to net zero. Together, Menzies and Tristar accounted for more than 74% of FY 2023 revenues. Agility Global’s third-largest business, Agility Logistics Parks, developed the first ever EDGE ADVANCED certified “zero-carbon ready” warehouses in the GCC (in Saudi Arabia) and West Africa (in Côte D’Ivoire)."