Sunday, March 24, 2019

EnBW Launched Green Bond

October 30, 2018

Pic: EnBW Energie Baden-Württemberg AG

German utility EnBW Energie Baden-Württemberg AG  has launched its first green bond on the capital market, with an issue size of €500m ($570.8m), which was oversubscribed within hours, the energy company said in a press release.

The bond issue, with a 15-year term to maturity, was oversubscribed within hours. The coupon is 1.875 percent.

In contrast to conventional corporate bonds, the proceeds from a green bond must be used exclusively to fund climate-friendly projects. EnBW is among the first German companies to have launched a green bond of this size. Increasing numbers of institutional investors now prefer sustainable investments.

“The transformation of our company towards renewable energies and smart infrastructure solutions is a core element of our strategy,” said CFO Thomas Kusterer. Far beyond that, however, sustainability is today an integral part of EnBW’s business model. “The fact that the bond was several times oversubscribed shows that issuing it as a green bond supports our strategy. That has also been rewarded by the capital market.”

ISS-oekom, a rating agency internationally recognised in the sustainability sector, has con-firmed that the EnBW bond complies with the Green Bond Principles. The applicable criteria were drawn up by the International Capital Market Association (ICMA).  

In addition, EnBW’s first green bond is also certified to the high standards of the Climate Bonds Initiative (CBI). These feature detailed sector-specific criteria for qualification as green bonds. The criteria are developed by teams of experts coordinated by an advisory board comprising institutional investors and (environmental) NGOs.

Kusterer: “For EnBW, today’s issue is a logical continuation of our strategy for the company as a whole. It is thus an example of funding follows strategy.”

The proceeds from the bond launched today will be allocated to projects in the fields of wind power, photovoltaics and electric mobility.


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