Italy’s Enel Group Launches €1.25bn Green Bond
Italian energy supplier Enel Group has launched its first Green Bond, worth €1.25 billion, as it starts a €12.4 billion refinancing programme.
Under the auspices of Enel Finance International N.V. (“EFI”), a wholly-owned subsidiary of Enel S.p.A., the bond is due to be listed on the Irish and Luxembourg markets. It will fully comply with the Green Bond Principles 2016 published by the International Capital Market Association (ICMA).
The categories of projects that qualify as eligible green projects include the development, construction and repowering of renewable power plants, the development of transmission and distribution networks and the implementation of smart grids and smart meters in the geographic areas in which the Group operates.
Media reports suggest that much of the finance raised will be used by Enel Green Power (EGP) to fund schemes such as the five wind energy projects totalling 850Mw it is developing in partnership with Moroccan energy company Nareva Holding and Siemens Wind Power. The latter will provide the turbines for the plants, all of which are located in Morocco.
The issuance of this bond is part of a trend that is seeing environmentally sound financial instruments gaining popularity. OPEN is very much a front runner in this trend, as evidenced by the recent announcement of OPEN Cleantech’s €500 million worth of Multi-Currency Secured Medium Term Bonds,. These too will focus on cleantech and environmentally sound investments.
In a statement Enel said its issuance is proving popular, particularly with Social Responsible Investors (“SRI”), enabling Enel to further diversify its investor base. The transaction received subscriptions worth approximately €3 billion.
The net proceeds raised from the issuance – carried out under the medium-term note programme of Enel and EFI (the Euro Medium Term Notes – EMTN programme) – will be used to finance the Enel Group’s eligible green projects.
The issue provides for repayment in one instalment at maturity on September 16th, 2024, as well as the payment of a fixed-rate coupon of 1%, payable annually in arrears in the month of September, as from September 2017. The issue price has been set at 99.001% and the effective yield to maturity is equal to 1.137%.
In its statement Enel said: “The transaction is in line with the financial strategy outlined in the Group’s 2017-2019 Strategic Plan, which provides for the refinancing of €12.4 billion including through the issuance of green bonds as instruments for financing projects related to the transition towards a low carbon economy.”
Enel is rated BBB by Standard & Poor’s, Baa2 by Moody’s and BBB+ by Fitch, and it is anticipated the Green Bond will have a rating in line with this.