Enel Finance International (EFI), the Dutch-registered finance company controlled by Enel, launched a multi-tranche “Sustainability-Linked bond” for institutional investors in the Eurobond market for a total of 3.5 billion euros.
At the same time, EFI launched a non-binding voluntary tender offer (“Tender Offer”) for the partial repurchase of three series of outstanding conventional bonds denominated in US dollars, for an overall maximum target amount of 1.5 billion US dollars, accelerating the Group’s targets of sustainable finance sources on the Group’s total gross debt.
“With the transactions we announce today, through which we are issuing new Sustainability-Linked bonds, while at the same time offering to repurchase outstanding conventional bonds, we are strengthening our commitment to accelerate the growth of sustainable finance, in line with the commitments undertaken within the CFO Taskforce initiative promoted by the United Nations Global Compact,” said Alberto De Paoli, Enel CFO.
The new issue is linked to the achievement of Enel’s sustainable objective relating to the reduction of Direct Greenhouse Gas Emissions (Scope 1), contributing to the United Nations Sustainable Development Goal 13 (Climate Action) and in line with the Group’s Sustainability-Linked Financing Framework (the “Framework”). The transaction follows the previous “Sustainability-Linked bonds” of 3.25 billion euros issued by EFI last June and of 4 billion US dollars issued by the same EFI last July.
The bond, guaranteed by Enel, was more than 3 times oversubscribed, with total orders of approximately 11 billion euros and the significant participation of Socially Responsible Investors (SRI), allowing the Enel Group to continue to diversify its investor base.
The success of the new issue is a clear acknowledgement of the Group’s sustainability strategy and of its ability to generate value by contributing to the achievement of the Sustainable Development Goals set by the United Nations. The value of sustainability has been reflected once again in the demand and in the pricing mechanics of the issue.
The proceeds from the issue are expected to fund the Group’s ordinary financing needs and the partial repurchase of the three series of outstanding conventional bonds denominated in US dollars covered by the Tender Offer.
The transaction is aligned with the Framework, updated in January 2021, which fully integrates sustainability into the Group’s global funding program. The Framework is aligned with the International Capital Market Association’s (ICMA) “Sustainability-Linked Bond Principles” and the Loan Market Association’s (LMA) “Sustainability-Linked Loan Principles”, as verified by the Second-Party Provider V.E.
In line with the Framework, the three tranches of the bond are linked to the Key Performance Indicator (KPI) of Direct Greenhouse Gas Emissions Amount (Scope 1) at Group level, measured in grams of CO2eq per kWh, contributing to the achievement of the United Nations Sustainable Development Goal 13.
In this respect, in October 2020, Enel announced a revision of its Group’s Scope 1 Direct Greenhouse Gas Emissions Amount for 2030, with a reduction of 80% compared with the 2017 baseline, reaching a carbon intensity lower than 82gCO2eq/kWh. The target is certified by the Science Based Targets initiative (SBTi) as consistent with limiting global warming to 1.5ºC above pre-industrial levels.
The expected path to the 2030 target also includes a target of Direct Greenhouse Gas Emissions Amount (Scope 1), measured in grams of CO2eq per kWh, equal to or lower than 148gCO2eq/kWh by 2023. The ultimate goal is to reach the full decarbonization of Enel’s energy mix by 2050.