Enel Finance International, the Dutch-registered finance company controlled by Enel , launched a multi-tranche Sustainability-Linked bond for institutional investors in the Eurobond market totaling 3.25 billion euros.
The bond is linked to the achievement of Enel’s sustainable objective related 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 world’s first Sustainability-Linked bonds priced by EFI in US dollars and euros in 2019 and the first Sustainability-Linked bond issued on the sterling market in 2020. The instrument EFI launched is also the largest Sustainability-Linked transaction ever priced in the fixed-income capital markets.
The bond, which is guaranteed by Enel, was oversubscribed 3.5 times, with total orders of approximately 11.3 billion euros and the significant participation of Socially Responsible Investors (SRI), allowing the Enel Group to continue to diversify its investor base.
At the same time, as indicated below, EFI launched a non-binding voluntary tender offer (the “Tender Offer”) for the repurchase of four outstanding series of conventional bonds for a target maximum aggregate amount of 1 billion euros, accelerating the achievement of the Group’s targets of sustainable finance sources on Group’s total gross debt.
“The launch of the largest Sustainability-Linked transaction ever priced marks a new, major milestone since Enel’s ground-breaking bond issues kick-started the global Sustainability-Linked bond market back in 2019, a market that continues to grow at an exponential rate, intercepting a variety of industrial sectors and geographies, and which is now a consolidated instrument of sustainable finance, ever more mainstream in the capital markets,” said Enel CFO, Alberto De Paoli. “With the transactions we are announcing, through which we are repurchasing existing conventional bonds from the market while, at the same time, issuing new “Sustainability-Linked” ones, we are reflecting in finance our commitment to accelerate the energy transition.”
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 transaction meets the Group’s ordinary financing needs and 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 Vigeo Eiris.
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 by 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.