The UAE’s state-owned Abu Dhabi National Energy Company (Taqa) was set to price a two-tranche green bond yesterday, Reuters reported, citing a bank document it has seen. The move came a week after Taqa mandated banks for the senior unsecured bond issuance following the launch of its Green Finance Framework. This will be Taqa’s second green bond issuance after it raised USD 701 mn in green senior secured bonds last January with the Emirates Water and Electricity Company.

What we know: Taqa has released the initial guidance for the long five-year tranche, setting it at around 120 basis points over US treasuries, the newswire reports. The 10-year green bond was around 145 basis points over treasuries, with both tranches expected to be estimated at least USD 500 mn.

Where’s the money going? Proceeds from the five-year tranche will be allocated to general corporate purposes, while the 10-year bond will be used to fund projects outlined within its Green Finance Framework including renewable energy, energy efficiency, sustainable water and wastewater management, clean transportation, and terrestrial and aquatic biodiversity.

Advisors: BNP Paribas, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, IMI-Intesa Sanpaolo, Scotiabank, SMBC Nikko and Standard Chartered Bank were appointed as mandated bookrunners and lead managers, according to the newswire. First Abu Dhabi Bank, HSBC, and Standard Chartered Bank are acting as joint green structuring advisers.

REMEMBER- Interest in green bonds and green sukuk has been on the rise in the region in recent months ahead of COP28 in the UAE. Sources told Reuters earlier this month that the UAE federal government, Abu Dhabi, and its sovereign wealth fund Mubadala are looking into issuing green bonds. Adnoc is also considering putting its bond plans back on the table and Masdar looking into issuances this year, according to the newswire. Saudi Electricity Co raised USD 2 bn through USD-denominated green and conventional sukuk this month, while Saudi Arabia’s Al Rajhi Bank also raised USD 1 bn from its five-year USD-denominated sustainable sukuk issuance the same week. Back in February, KSA’s sovereign wealth fund the Public Investment Fund (PIF) sold USD 5.5 bn of green bonds in its second issuance of the debt instruments.