TenneT Holding B.V. yesterday launched and priced its inaugural Green Bond issue, a EUR 1 billion dual tranche (6 and 12 year) bond issue, each sized at EUR 500 million with coupons of 0.875% and 1.750% respectively with the support of five banks, HSBC Bank plc., ING Bank N.V., Royal Bank of Scotland, Lloyds TSB Bank plc. and Rabobank.
Otto Jager, TenneT’s Chief Financial Officer , said: “Today’s inaugural Green Bond issue demonstrates our commitment to working with our stakeholders to continually improve and innovate in our approach to Corporate Social Responsibility while at the same time achieving attractive long-term financing to support investment in three offshore wind transmission projects in Germany. I expect that this will be the first of a series of Green Bond issues for TenneT.”
An important investor among the many parties that came forward is the German promotional bank KfW, TenneT said. KfW has very recently announced to build up a EUR 1 billionn green bond portfolio to refinance projects that actively contribute to environmental protection and the prevention of climate change.
Rita Geyermann, Head of KfW Asset Management states: “TenneT plays a central role in the energy transition process and we highly welcome to participate in this very convincing Green Bond issued under its Green Bond Framework.”
The announcement relates to the issuance of Green Bonds for investments in the transmission of renewable electricity from offshore wind farms to the onshore electricity grid. The following offshore projects are financed with the proceeds:
– DolWin1 (commissioning 2015): a 165 km HVDC (high voltage direct current) link with 800 MW capacity. – DolWin2 (commissioning 2015): a 135 km HVDC link with 916 MW capacity. – DolWin3 (commissioning 2017): a 162 km HVDC link with 900 MW capacity.
“Future TenneT Green Bonds could not only be used to finance other sustainable projects of TenneT in Germany, but also for Dutch offshore projects to connect offshore wind farms to the Dutch grid,” Otto Jager adds.
TenneT’s investments in offshore wind energy projects across the Netherlands and Germany are expected to total EUR 7 to 9 billion over the next 10 years.
In the period up to 2019, TenneT is realizing over 7,000 megawatts (MW) of connection capacity for offshore wind farms in the German sector of the North Sea, transmitting electricity equivalent to the annual power consumption of approx. 9 million households. By 2023, the TSO expects to have realized 3,500 MW of connection capacity in the Dutch sector of the North Sea, corresponding to the annual power consumption of over 4 million households.
In April, TenneT published a Green Bonds Framework which serves as a structure for verifying the sustainability quality (i.e. the social and environmental added value) of the projects to be financed through the issuance of Green Bonds. The Framework was prepared in collaboration with oekom Research AG, who provides a second-party opinion in relation to a potential upcoming Green Bond.
Additionally, TenneT has incorporated into its existing EMTN (Euro Medium Term Note) Programme specific Use of Proceeds provisions designed to be aligned with the Green Bond Principles.