Masdar looks to future growth with award of milestone investment grade credit ratings

Moody’s Investor Services and Fitch Ratings have assigned Masdar first-time credit ratings that place it firmly in the investment grade category – a significant milestone for the company.

Moody’s and Fitch, two of the leading agencies that evaluate the creditworthiness of commercial and sovereign entities, issued long-term ratings of A2 and A+ respectively, both with a stable outlook, following extensive due diligence in accordance with their global ratings standards.

Masdar’s status as a Government Related Entity (GRE) of the Government of Abu Dhabi, itself rated Aa2 by Moody’s and AA by Fitch, and the company’s status as a subsidiary of Mubadala Investment Company and Mamoura Diversified Global Holding PJSC, were key drivers in determining the ratings.

While Masdar has no concrete plans to raise capital, the credit ratings will provide the company with a solid platform to access capital markets, providing greater flexibility for financing of and investment in new projects at competitive rates as it accelerates its global expansion. Masdar is already committed to renewable energy projects across more than 30 countries, with a combined value of US$20 billion and a generation capacity nearing 13 GW.

In setting the rankings, the agencies highlighted Masdar’s extensive track record and sector expertise, in addition to its very low exposure and reliance on external debt, supported by strong backing from Mubadala and the government of Abu Dhabi.

Musabbeh Al Kaabi, Chief Executive Officer of the UAE Investments at Mubadala, said: “The A2 and A+ ratings from Moody’s and Fitch are a reflection of Masdar’s robust portfolio of renewable energy and sustainable real estate assets and its crucial role in the diversification of the Abu Dhabi economy. The ratings demonstrate the strength of Masdar’s position as a global player in the sustainable development sector and validate the futuristic ambitions that started 15 years ago when Mubadala first incubated Masdar as the UAE’s renewable energy and sustainable urban development arm.”

When assessing the company’s main revenue drivers, the ratings agencies made the link between Masdar City, the company’s flagship sustainable urban development project, and increasing global appetite for sustainable real estate developments, with the added advantage of Masdar being a freezone located strategically between Europe and Asia. They also analysed Masdar’s second primary revenue source, its investments in global clean-energy projects, with the global surge in awareness on climate action increasing demand for energy-transition investments and providing solid long-term growth opportunities for the company.

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said: “The award of these investment grade credit ratings marks a key milestone in Masdar’s development journey. The ratings are a strong endorsement of Masdar’s financial stability and the creditworthiness of our core business model, and reflect confidence in Masdar’s cash generation ability, unrestricted liquidity and future growth prospects as an Abu Dhabi-based company. As we progress on our global expansion journey, we recognize the importance of transparency and good governance and our first-time ratings are testament to those values.”