UAE: S&P assigns AA- rating to Masdar, outlook stable
This results in six notches of uplift from Masdar's stand-alone credit profile (SACP) of 'bbb-', leading to an 'AA-' long-term issuer credit rating.
'We think that Masdar has an extremely high likelihood of receiving timely and sufficient financial support from the government of Abu Dhabi. The group has the very important role of leading the emirate's renewable goals, and it benefits from having integral ties with the state government,' the ratings agency said in a statement.
Masdar retains priority on the mandate for renewable energy for Abu Dhabi, being a key vehicle for the UAE in achieving its goals of tripling renewable energy by 2030. The UAE government has pledged to make the country carbon neutral by 2050 and plans to invest heavily in alternative energy sources that are both renewable and clean.
Masdar benefits from an established global market position in the clean energy development business, a diversified capacity base, and an ambitious growth strategy sponsored by the government.
There is ample evidence and a solid track record of state support to accompany Masdar's growth. The group has thus far received over Dh20 billion in equity support from the government to finance its acquisitions on growing platforms. 'We think that the Emirate of Abu Dhabi is willing and able to provide extraordinary financial support,' the ratings agency noted.
Masdar's strategy of acting as a platform investor and aggregator has significantly expanded its scale and diversity. From 2021 to March 2025, Masdar's gross capacity (considering operational, under construction, and committed projects) increased to 33 gigawatt (GW) from 15 GW. This trajectory was backed by a dual business model that combines greenfield development with strategic acquisitions — each supported by appropriate funding sources. 'The company has a portfolio of geographically diverse assets in strategic locations across the globe and exposed to well-proven renewable technologies, notably utility-scale solar photovoltaic (PV) and onshore wind capacity, which together account for more than 80 per cent of Masdar's generation base,' S&P Global Ratings said.
The continuous support and the privileged access to low-cost financial resources thanks to its government links are a major differentiating factor when assessing the group's financial solidity and capacity to sustain high leverage. 'Despite Masdar's heightened leverage, the company — which is a pioneer in green bond financing in the UAE — managed to raise about Dh10 billion so far in 2025, with a low coupon rate of about 5 per cent,' the agency said.
Masdar's strong diversification, government-backed growth model, and hands-off approach to distressed assets all support the deconsolidated financial analysis approach. Unlike many of its peers, Masdar's business model ensures that its financial risk profile is not tied to individual projects or their associated debt. 'Masdar's deconsolidated debt-to-Ebitda is likely to increase to 5.0x-6.0x over 2025 and 2026, from 1.8x in 2024, before falling to 2024 levels as all the development activity Masdar has undertaken over the past year—particularly through the acquisitions of growth platforms — become operational and begin generating cash,' S&P Global analysts wrote.
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