Europe: TenneT successfully issues EUR 1 bn Green Bond

TenneT Holding B.V. (rated A3/A-) successfully launched and priced its second Green Bond issue, a EUR1bn dual tranche (10 and 20 year) bond issue, each sized at EUR 500m with coupons of 1.000% and 1.875% respectively with the support of five banks, Barclays Bank plc, BNP Paribas, Deutsche Bank AG, ABN AMRO Bank N.V. and SMBC Nikko Capital Markets Limited.

Otto Jager, TenneT’s Chief Financial Officer, said: “This second consecutive Green Bond issue demonstrates that the green project portfolio approach works very well. By adding one further offshore German wind transmission project to the programme provides us the possibility to continue the issuance of Green Bonds. This underpins TenneT's ambition to be the best performing TSO in Northwest Europe in terms of Corporate Social Responsibility." 

Moody's has assigned under its newly developed Green Bond Assessment methodology these green bonds a GB1, which is on a scale of GB1 (= Excellent) to GB5 (= Poor) the highest rating possible evidencing the fact that TenneT has followed the green bond principles very closely.

Investing in green energy

The announcement relates to the issuance of Green Bonds for investments in the transmission of renewable electricity from offshore wind farms to the onshore electricity grid. The following offshore projects are financed with the proceeds:

• DolWin1 (commissioned 2015): a 165 km HVDC (high voltage direct current) link with 800 MW capacity.
• DolWin2 (commissioned 2016): a 135 km HVDC link with 916 MW capacity.
• DolWin3 (commissioning 2017): a 162 km HVDC link with 900 MW capacity.
• BorWin3 (commissioning 2019): a 160 km HVDC link with 900 MW capacity.

TenneT Green Bonds could not only be used to finance other sustainable projects of TenneT in Germany, but in the future also for Dutch offshore projects to connect offshore wind farms to the Dutch grid.

TenneT’s investments in offshore wind energy projects across the Netherlands and Germany are expected to total EUR 8 to 10 billion over the next 10 years. In the period up to 2019, TenneT is realizing over 7,000 megawatts (MW) of connection capacity for offshore wind farms in the German sector of the North Sea, transmitting electricity equivalent to the annual power consumption of approx. 9 million households. By 2023, the TSO expects to have realized 3,500 MW of connection capacity in the Dutch sector of the North Sea, corresponding to the annual power consumption of over 4 million households.

Green Bonds Framework

Earlier (April 2015) TenneT published a Green Bonds Framework which serves as a structure for verifying the sustainability quality (i.e. the social and environmental added value) of the projects to be financed through the issuance of Green Bonds. The Framework was prepared in collaboration with oekom Research AG, who provides a second-party opinion in relation to a potential upcoming Green Bond. It is available on TenneT’s website at GreenBond.

Additionally TenneT has incorporated into its existing EMTN (Euro Medium Term Note) Programme specific Use of Proceeds provisions designed to be aligned with the Green Bond Principles.