Taqa raises $1.5bn from dual-tranche bond to fund growth

Abu Dhabi National Energy Company, better known as Taqa, has raised an aggregate $1.5 billion through dual-tranche bond issuances, including its first green bond, as it continues to invest in expansion and diversifies its sources of funding.

Taqa, among the largest integrated utilities in the Europe, Middle East and Africa region, raised $1 billion from its debut green bond, net proceeds of which will be used for financing, refinance and investment in green projects, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

The 10-year senior unsecured bond maturing in April 2033, carries a coupon of 4.696 per cent. A five- year tranche of $500 million, maturing in January 2029, was issued as conventional bonds at a coupon rate of 4.375 per cent. Taqa plans to use the proceeds of the deal for general corporate purposes, it said.

The aggregate order book of both conventional and green bond issuances reached almost $15 billion, as the deal was about 10 times oversubscribed. The company received “very strong demand from domestic, regional and international investors” for the notes, which are expected to be rated Aa3 by Moody’s and AA by Fitch, in line with the company’s corporate credit ratings, Taqa said.

“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 Thabet, group chief executive and managing director.

Earlier this month, Taqa launched its green finance framework for the issuance of green bonds, sukuks, loans and other debt instruments to support its net-zero goal.

The company plans to use proceeds from such deals for “eligible green projects”, including renewable energy, energy efficiency, sustainable water and wastewater management, clean transportation and terrestrial and aquatic biodiversity, it said at the time.

Projects financed under the framework will contribute to the company’s 2030 environmental, social and governance (ESG) targets and its goal of achieving net zero by 2050, in line with the UAE’s ambitions, it said.