Abu Dhabi’s TAQA sells $1.5bn in dual-tranche bond
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Abu Dhabi’s TAQA sells $1.5bn in dual-tranche bonds

Abu Dhabi’s TAQA sells $1.5bn in dual-tranche bonds

Proceeds from the five-year tranche will be used for general corporate purposes while the 10-year green bond will be used to finance projects as set out in the framework

TAQA power generation

TAQA, also known as Abu Dhabi National Energy Company, has issued a $1.5bn dual-tranche bond, the utility company’s first green bond following the launch of its new green finance framework.

The 10-year notes, sized at $1bn and maturing on April 24, 2033, were issued as green bond at a coupon rate of 4.696 per cent and the proceeds will be used to finance, refinance and invest in relevant eligible green projects.

The five-year notes, sized at $500m and maturing on January 24, 2029, were issued as conventional bonds at a coupon rate of 4.375 per cent and the proceeds from the issuance will be used for general corporate purposes.

“With a final order book approaching $15bn, the transaction was almost 10 times oversubscribed with a very strong demand from domestic, regional and international investors,” TAQA said in a bourse filing.

The notes are expected to be rated Aa3 by Moody’s and AA by Fitch Ratings in line with the corporate credit ratings of the company.

“TAQA has yet again achieved competitive funding in our latest bond offering which has attracted strong demand from investors across several capital markets,” said Jasim Husain Thabet, TAQA’s group CEO and managing director.

“TAQA’s ESG Strategy and decarbonisation agenda has enabled us to complete our first-ever green bond, following the launch of our new green finance framework and allow us to cater to the growing demand for investors seeking credible green investment opportunities,” added Thabet.

BNP Paribas, Emirates NBD Capital, First Abu Dhabi Bank (FAB), HSBC, ICBC, IMI-Intesa Sanpaolo, Scotiabank, SMBC Nikko and Standard Chartered Bank are mandated book runners and lead managers.

FAB, HSBC and Standard Chartered Bank are joint green structuring advisers.

TAQA’s green finance framework

Meanwhile, the company unveiled its green finance framework for the issuance of green bonds, Sukuks, loans and other debt instruments earlier in April.

The utility firm said proceeds from the issuances will be used to finance eligible green projects including renewable energy, energy efficiency, sustainable water and wastewater management as well as clean transportation, terrestrial and aquatic biodiversity.

Read: UAE utility firm TAQA sets up green finance framework

TAQA said its green finance framework is aligned with the global best practice set out under the four core components of the Green Bond Principles 2021 that was published by the International Capital Market Association.

TAQA sustainable energy projectThe financing framework was given a sustainability quality score of SQS2 (very good) – the second highest score under Moody’s Second Party Opinion (SPO) scoring framework, which means it demonstrates a significant contribution to sustainability.

The company unveiled its 2030 ESG Strategy in October 2022 with interim greenhouse gas emissions reduction goals of 25 per cent of scope 1 and 2 emissions and a 33 per cent reduction of UAE portfolio emissions, with 2019 as the baseline.

It aims to make renewables 30 per cent of its share of generation by that date, which it said had been accelerated by its acquisition of a 43 per cent stake in the renewables business of fellow Abu Dhabi-based company Masdar.

The company’s annual revenues surged 10.3 per cent to Dhs50bn, driven by higher oil prices that averaged nearly $100 a barrel in 2022. It reported a full-year net income of Dhs8 bn, an increase of Dhs2bn, which was boosted by the company’s oil and gas segment and lower depreciation expense supporting bottom-line growth. Shareholders in the company approved a special dividend of 2.1 fils per share for FY2022 bringing total dividends to 5.1 fils.

Read: UAE power and water firm Taqa seeks to slash emissions by 2030

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