Abu Dhabi National Energy Company (TAQA) has successfully priced its $1.75 billion dual-tranche bond offering, continuing its strategy of leveraging debt to support both its business objectives and environmental commitments. The issuance consists of two portions: a seven-year tranche worth $900 million, maturing in 2031, and a 12-year tranche of $850 million, maturing in 2037. The longer-term bonds come with a coupon rate of 4.75%, while the shorter-term tranche carries a 4.1% coupon rate.
This marks TAQA’s second foray into green bond markets, with the proceeds of the 12-year bonds designated for financing and refinancing eligible green projects under the company’s green finance framework. The funds will focus on sustainable initiatives such as renewable energy generation, energy efficiency upgrades, and climate-resilient infrastructure, demonstrating TAQA’s increasing commitment to environmental, social, and governance (ESG) goals. Green bond issuances have become a key tool for corporations aiming to align with global sustainability targets, and TAQA’s move underscores the role the company is playing in the UAE’s drive toward net-zero carbon emissions by 2050.
TAQA’s green bond offering is part of a broader trend within the Gulf region, where several companies are ramping up their issuance of sustainable debt instruments to meet rising investor demand for environmentally conscious projects. With this bond, TAQA joins regional players like Saudi Aramco and Dubai Electricity and Water Authority (DEWA) in tapping global debt markets to fund green ventures. The Gulf Cooperation Council (GCC) region has seen a steady rise in green and sustainable finance as companies look to diversify funding sources while aligning with global environmental standards.
The seven-year tranche of the bond, although not specifically designated as green, will help the company manage its overall capital structure and meet general corporate financing needs. TAQA’s decision to issue dual-tranche notes aligns with the company’s broader strategy to secure long-term, sustainable financing for its growth ambitions, both in traditional and renewable energy sectors. The company has set ambitious targets for expanding its portfolio of low-carbon and renewable energy projects, particularly in solar and wind power.
TAQA, one of the largest listed integrated utilities in the region, continues to be at the forefront of energy transition efforts in the UAE. The bond issuance follows a series of major investments in renewable energy projects. The company, which operates 23 gigawatts of power generation capacity and 95,000 kilometers of water and electricity transmission networks globally, is increasingly positioning itself as a leader in the sustainable energy sector.
The offering was met with strong demand from global investors, reflecting the market’s confidence in TAQA’s financial stability and future outlook. Bond offerings of this nature also serve as an indicator of the broader investor sentiment toward green finance in emerging markets. Investors have been keen to support issuers with robust ESG credentials, and TAQA’s green finance framework has helped it tap into this growing demand. The success of the bond issue further strengthens TAQA’s liquidity position and enhances its ability to pursue growth opportunities in renewable energy and other sustainable projects.
TAQA’s foray into green bonds is part of a larger movement in the energy sector as companies seek to align their operations with global climate goals. In 2023, TAQA partnered with Mubadala Investment Company and Abu Dhabi National Oil Company (ADNOC) to develop the UAE’s largest solar power plant. The company has also announced its intention to reach a 30% reduction in carbon emissions by 2030, making sustainability a core focus of its business strategy. With its latest bond issuance, TAQA is positioning itself to continue leading the region’s transition to a greener energy future.
As global pressure mounts for decarbonization, the growing appetite for green bonds is expected to drive further innovation and investment in sustainable infrastructure. The success of TAQA’s dual-tranche offering indicates a favorable market environment for such issuances, and it is likely that other regional utilities will follow suit in the coming years as the GCC region looks to diversify its energy mix and reduce its reliance on fossil fuels.
____________________________________
This article first appeared on Greenlogue and is brought to you by Hyphen Digital Network
