Sustainability is an increasingly critical lever for the generation of economic and financial value.
SDG Linked Bond
revolving line of credit linked to SDG7
sustainable sources of borrowings
Enel has placed three green bonds on the European market with a total value of 3.50 billion euros, respectively in January 2017 (1.25 billion), 2018 (1.25 billion) and 2019 (1 billion). The green bonds issued by Enel Finance International NV are destined for institutional investors and guaranteed by Enel SpA. The issue of green bonds is aimed at financing projects that are functional to the transition to the low carbon economy. For details, refer to the chapter “Green Bond Report”.
In September of 2019 Enel issued the world’s first general purpose SDG-linked bond on the US market and on international markets, for a total amount of 1.5 billion US dollars, linked to SDG 7 “Affordable and clean energy”. This bond issue, which is the first of its kind and destined to satisfy the Company’s ordinary financial requirements, is linked to the Group’s ability to reach a percentage installed renewable capacity (on a consolidated basis) equal to or higher than 55% of the total consolidated installed capacity, by December 31, 2021. To assure and guarantee the transparency of results, accomplishment of this goal will be subject to specific assurance by the appointed auditor. The interest rate applied will remain fixed until the debenture loan matures in relation to the achievement of the above indicated sustainable objective at December 31, 2021: in the event of failure to accomplish this goal, a step-up mechanism will be applied with an increase of 25 bps of the interest rate, starting from the first interest period following the date of publication of the auditor’s assurance report. After the success of said placement, Enel launched a new SDG-linked bond on the European market for the total amount of 2.5 billion euros. In addition to the objective linked to SDG 7 inserted in the previous issue, a further target linked to SDG 13 “Climate action” was added (emissions of greenhouse gases equal to or lower than 125 gCO2/kWheq within 2030). On both occasions, Enel obtained an average economic benefit of around 15 bps with respect to a potential issue without sustainable characteristics. In addition, in October Enel SpA signed an agreement with UniCredit SpA for the first revolving line of credit linked, as in the case of the above mentioned bond issues, to SDG 7 for the value of 1 billion euros and duration of 5 years. In relation to accomplishment of the target within the prescribed date, the line of credit provides a step-up/step-down mechanism that will affect the interest margin if the line is used, or the commission, if the line is not used. Enel has planned to increase the recourse to sustainable sources of borrowings from the 22% of 2019 to 43% in 2022 and to around 77% in 2030.
Enel è stata riconosciuta dall’International Financing Review (IFR) come ESG Issuer dell’anno in occasione degli IFR Awards 2019, per il suo impegno verso una strategia sostenibile che ha innovato il mercato della finanza. Inoltre, i bond quinquennali SDG-linked del Gruppo, del valore di 1,5 miliardi di dollari statunitensi, sono stati nominati Yankee Bond del 2019.
Enel was recognised by the International Financing Review (IFR) as the ESG Issuer of the year at the time of the 2019 IFR Awards, for its commitment to a sustainable strategy that has revolutionised the borrowing market. Moreover, the Group’s five-year SDG-linked bonds, valued at 1.5 billion US dollars, were elected Yankee Bond of 2019.