Iberdrola has signed a new credit facility amounting to €2.5bn with 21 banks, linked to sustainability indicators.
The facility has a term of five years, extendable for a further two years, and is multi-currency and the conditions of the subscription have pre-covid levels, with prices similar to Iberdrola’s last such transaction in March 2019.
This approach to financing will support a €75bn investment plan launched by Iberdrola between now and 2025, aimed at doubling its renewable capacity to 60GW and increasing the value of its network assets to €47bn.
With planned investments by 2030 standing at €150bn, the group will reach an installed capacity of approximately 100,000MW.
The new credit line is also the first transaction of a Spanish company referenced to risk free rates (RFR) instead of Libor, with the indices serving as a model for future financing.
The credit line is subject to two sustainability indicators, related to environmental and social issues. Based on performance, the margin of the operation can be adjusted step up or step down.
The first indicator is related to the group’s emissions reduction, in line with UN Sustainable Development Goals (SDGs) 3 and 17.
Iberdrola’s CO2 emissions target by 2025 is set at below 70 g per kilowatt-hour.
Emissions in 2020 were 98 g/kWh, a reduction of 11% on the year before.
The second indicator is associated with the increase in the number of women in leadership positions in the company. In this regard, Iberdrola has proposed that 30% of these positions should be occupied by women by 2025, in line with UN SDG 5, related to gender equality.
Iberdrola and the banks involved in the operation have also introduced, for the first time, a third social factor.
Each year, a financial contribution will be made by Iberdrola to a sustainable project, for an amount depending on the degree of utilisation of the line. The beneficiary project will be defined in 2022 and the first contribution will be made in 2023.
The financial institutions syndicating this credit facility also demonstrate their sustainable commitment to a project, aligned with SDGs 5, 7 and 13 to which the operation is linked.
BBVA acted as the agent bank and sustainability coordinator, together with Unicredit.
With today´s agreement, Iberdrola has moved closer to its goal of having 100% of its credit lines green or sustainable by 2025, which stands at 90%.
In 2018 Iberdrola closed the largest ever credit facility (€5.8bn) under sustainability criteria.
At present, the energy company has outstanding green or sustainability-linked financing of more than €32bn, of which more than €13bn comprises green bonds.
Iberdrola’s strategy is for its financing structure to have an increasingly higher percentage of green and sustainable products, reaching 63% of the total by 2025.