EnBW updates Green Financing Framework
Karlsruhe. The transformation of the energy sector to achieve the climate targets involves enormous capital spending. EnBW is to invest around €40 billion in implementing the energy transition by 2030 alone. Over half of this is for the expansion of electricity and gas grids. A further third will be used to decarbonize the generation portfolio by expanding renewables and building new, flexible, hydrogen-ready gas-fired power plants. EnBW aims for renewables to account for more than half of its generation portfolio by as early as the end of 2025 and to phase out coal-fired power generation by the end of 2028. These are key milestones on the way to company’s carbon neutrality by 2035.
Today, EnBW published an update of its Green Financing Framework. All of the Group’s green financing instruments, such as green bonds, are issued on the basis of this framework. It was first published in October 2018 and has been regularly updated since, as sustainability is a major concern not only for EnBW, but also for investors and banks.
Marcel Münch, Senior Vice President Finance, M&A and Investor Relations at EnBW: “Since 2018, EnBW has successfully issued over €5 billion in green bonds on the capital market. This means that around half of EnBW’s outstanding bond issues now are green bonds, and we aim to increase the proportion of sustainable financing instruments to more than 85% by 2030. The Green Financing Framework that we published today provides the basis for the financing of our corporate strategy, which is geared towards sustainability and decarbonization. This gives investors the assurance that the use of the proceeds is 100% aligned with the EU Taxonomy.”
The main points of the EnBW Green Financing Framework:
- The focus of projects eligible for green financing has been expanded to include hydropower and electricity transmission grids. The project categories wind and solar projects, electricity distribution grids, smart meters and electric vehicle charging infrastructure were already included in the previous Green Financing Framework.
- The Framework is consistent with both the current ICMA Green Bond Principles and the current LMA Green Loan Principles and is therefore in accordance with all relevant market standards.
- In addition, the Green Financing Framework stipulates that all green financing proceeds can only be used for EU Taxonomy-aligned projects that also contribute to at least one of the 17 UN Sustainable Development Goals (UN SDGs 7, 9, 11, or 13).
The independent sustainability agency ISS-Corporate issued a second party opinion confirming compliance with the ICMA and LMA principles, the company’s sustainability strategy and the positive contribution of the financed projects to the achievement of the UN SDGs and the EU taxonomy.
Sustainability is an integral part of EnBW’s business model. This also includes a sustainable financial strategy. EnBW’s commitment to sustainability is also demonstrated by the fact that the company has established “proportion of taxonomy-aligned capex” as a key performance indicator, thus providing transparency on the sustainability of investment spending. Its annual target for this indicator is at least 85%.
EnBW was advised by ING on the structuring of the Green Financing Framework.