Orsted is issuing green senior bonds in the UK market to finance its global offshore wind expansion over the next six years.
The money raised will be invested in the 1386MW Hornsea 2 offshore wind farm off the east coast of England, part of a target of 15GW of installed offshore wind capacity by 2025.
Orsted announced the target in its Capital Markets day held on 28 November 2018, which is up from the previous goal of 12GW.
The bonds will be issued as green bonds where the proceeds will be applied for the financing of Orsted’s investments in accordance with the developer’s green finance framework, which was updated in April 2019, together with Nordea as Orsted’s green finance adviser.
With the bond issuance, Orsted is targeting a multi-tranche senior unsecured Pound-Sterling green bond, subject to market conditions.
Tranches may include benchmark eight-year and 14-year nominal fixed rate tenors, alongside a potential index-linked tranche with an expected 15-year maturity.
The final sizes and pricing of the green bond tranches will be determined when the book-building process closes.
Orsted has appointed Barclays Bank, Goldman Sachs International, Morgan Stanley International and NatWest Market as joint lead managers on the bond issuances.
In its 2018 Capital Markets day, Orsted said it expects to reach more than 30GW of operational projects across its renewables portfolio, including onshore wind, “towards 2030”, up from around 10GW due online in 2020, and will invest Dkr200bn by 2025.
Offshore wind will account for between 75% and 85% of the investment, onshore wind 15% to 20% and the remainder covering bioenergy and customer solutions.
Overall, the strategic plan is expected to increase the share of green energy in the company’s generation mix to 99% by 2025 from 64% in 2017.