EnBW successfully issues corporate green bonds

Karlsruhe. Today, EnBW successfully placed two green bonds with issue sizes of €500 million each for a total issuance volume of €1 billion. The offer was very well received in the capital markets. Combined order books peaked at around €7 billion. The proceeds will be used exclusively to fund climate-friendly projects.

EnBW CFO Thomas Kusterer: “We must now accelerate the transition to carbon-neutral energy supplies in Germany, because every megawatt-hour from renewable energies reduces the dependency on fossil fuels. This is why the vast majority of our investment is allocated to grid expansion and expanding our fleet of renewables.”

For the first time, the funds from a green bond issuance will be used to expand and refinance electricity distribution grids in Baden-Württemberg. The bond has a term of seven years. Netze BW, EnBW’s subsidiary responsible for the distribution grid, has been climate-neutral since 2021. According to the EU Taxonomy, investments in grid expansion are fully recognised as green economic activities.

“The expansion and technical upgrading of energy grids are crucial building blocks for a successful energy transition,” said Christoph Müller, Managing Director of Netze BW. “Recognising them as green economic activities is therefore only logical, because the power grid of the future will need huge investment in the years ahead. The energy transition needs infrastructure.”

In the context of this transaction, “electricity networks” were added as a new project category in the EnBW Green Financing Framework.

The proceeds from the four-year green bond will be used to fund renewable energy projects. These include, firstly, the offshore wind projects Morgan and Mona in the Irish Sea and Morven off the Scottish coast. EnBW is developing these jointly with bp. Secondly, the funding goes to onshore wind farms in Germany, among others in the states of Brandenburg, Schleswig-Holstein and Saxony-Anhalt, together with solar farms that are already generating electricity in Mecklenburg-Western Pomerania and Baden-Württemberg.

Sustainability rating agency ISS ESG has confirmed that both of today’s EnBW bonds comply with the Green Bond Principles and have good sustainability credentials. EnBW, as the issuer, has also once again been attested good sustainability performance. EnBW Green Bonds also are certified to the high standards of the Climate Bonds Initiative (CBI). These feature detailed sector-specific criteria for qualification as green bonds.

Sustainability is an integral part of EnBW’s business model. This also includes a sustainable financial strategy. EnBW is represented in expert bodies such as the Task Force on Climate-related Financial Disclosures (TCFD) – an initiative of the Financial Stability Board – the EU Platform on Sustainable Finance and the German government’s Sustainable Finance Advisory Council.

EnBW was supported in issuing the bonds by a banking syndicate comprising Barclays, Société Générale and Unicredit and additionally Deutsche Bank, DZ BANK, MUFG and SEB. The issue date will be 22 November 2022. The bonds carry a coupon of 3.625 percent and 4.049 percent and have maturities of four and seven years, respectively.