The fundraising has exceeded expectations.
Earlier this month, the semi-State energy group, ESB, announced its plan to raise fresh finance this year through the bond market, contingent upon favorable conditions. It has now successfully raised €1 billion through the issuance of two benchmark bonds. These include a 12-year green bond with a 4.25% interest rate and a five-year bond with a 4% coupon.
The proceeds from the green bond will be exclusively utilized for financing eligible renewable energy projects, such as smart meters, battery storage, solar power, and wind generation. ESB believes that these investments will play a crucial role in driving Ireland’s transition towards clean energy and supporting the company’s strategic goals.
The successful issuance of the bonds, primarily purchased by investors across Europe, reflects the confidence in ESB’s ambitious Net Zero by 2040 strategy. With orders received amounting to approximately €3.5 billion, ESB’s investment program continues to be highly regarded.
Danske Bank, JP Morgan, RBC Capital Markets, and Société Générale managed the placement of the bonds.
Anne Marie Kean, ESB’s group treasurer, expressed her satisfaction with the response to the bond issuance, emphasizing the strong investor confidence in ESB’s Net Zero by 2040 strategy. She stated that the funds raised will support ESB’s capital expenditure program, contributing to energy security and reducing the carbon footprint of its networks and generation portfolio, aligning with the company’s strategic aim of achieving Net Zero by 2040.
This marks the third issuance of green bonds by ESB in five years. ESB has recently updated its green bond framework to adhere to the latest sustainable finance standards, including compliance with the EU taxonomy regulation.
To support its network upgrades and renewable energy initiatives, ESB has significant financing requirements in the coming years, with an annual capital expenditure requirement of approximately €2 billion. Currently, ESB’s net debt stands at just under €6 billion.
ESB’s Chief Financial Officer, Paul Stapleton, discussed the organization’s need to borrow more in order to fund upcoming substantial investments. He highlighted ESB’s investment grade rating, supported by strong profits from the generation side and reasonable profits from the network side, but stressed the lack of contribution from Electric Ireland at present.
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