Enel Finance International (EFI), the Dutch-registered finance company controlled by Enel S.p.A. (“Enel”), launched a dual-tranche “Sustainability-Linked Bond” for institutional investors in the Eurobond market for a total of 1.5 billion euros. The issue, which has an average duration of approximately 14 years, has an average coupon of 4.25%.
The new issue envisages for the first time the use by Enel of multiple Key Performance Indicators (“KPIs”) per tranche, further strengthening Enel’s commitments towards an accelerated energy transition. For the first time in a public bond issuance, a tranche of the bond couples a KPI linked to the EU Taxonomy with a KPI linked to the United Nations Sustainable Development Goals (“SDGs”). The other tranche of the bond is linked to two KPIs related to the Group’s full decarbonization path, across direct and indirect greenhouse gas emission reduction, as detailed below.
“We are enthusiastic to introduce this groundbreaking tool to the market, the first of its kind to establish a link between the EU taxonomy and the United Nations SDG 13 on climate action,” said Alberto De Paoli, Enel CFO. “Through our investments in decarbonized technologies we comply with the EU taxonomy and for this reason we are set to achieve the United Nations SDGs. This inextricable link between SDGs and taxonomy is embedded in our Strategy and reflected in all the financial tools we are using as well as in our industrial decisions. Through this synergistic approach, we are working relentlessly to achieve our decarbonization and electrification targets while enhancing the energy security of our countries of presence, paving the way for the creation of long-term sustainable value for all.”
The bond, which is guaranteed by Enel, was almost 3 times oversubscribed, with total orders of approximately 4 billion euros and the significant participation of Socially Responsible Investors (SRI), enabling the Group to continue to diversify its investor base.
The success of the bond is a clear acknowledgement of the Group’s sustainability strategy and of its ability to generate value by steering an investment plan in line with the European Union Taxonomy criteria, while contributing to the achievement of the United Nations SDGs.
The proceeds from the issue are expected to be used by EFI to fund the Group’s ordinary financing needs.
With the Strategic Plan presented to the financial community in November 2022, Enel committed to rolling out more than 80% of its 2023-2025 investment plan in line with the EU Taxonomy criteria due to their substantial contribution to climate change mitigation.
In December 2022, Enel’s commitment to fighting against climate change achieved a new historic milestone as it increased the ambition of its decarbonization roadmap by setting new greenhouse gas reduction targets, which covered its direct and indirect emissions and were certified by the Science Based Targets initiative (SBTi) as consistent with limiting global warming to 1.5ºC, and therefore aligned to the most ambitious temperature goal of the Paris Agreement adopted by the United Nations in 2015.
Enel’s new certified targets follow the ambitious goal the Group had disclosed more than one year ago, when it brought forward its zero emissions commitment by ten years, from 2050 to 2040. In addition, the new certified targets cover all Group emissions along its value chain, including direct emissions from its facilities, as well as upstream and downstream indirect emissions from its suppliers and customers.