Dutch-German grid operator Tennet has issued a green hybrid bond valued at €1bn.
Proceeds will be used to invest in green projects in the Netherlands and Germany to connect offshore wind farms in the North Sea to Tennet’s onshore power grid.
The funds will also be invested in upgrades to onshore transmission capacity to integrate more renewable energy into the grid.
The hybrid green bond has a coupon of 2.374% and a non-call period of 5.25 years.
The issue will strengthen Tennet’ s balance sheet as it will receive 50% “equity credit” from the credit rating agencies.
Ten banks supported the transaction, including BNP Paribas and HSBC as joint structuring advisors and joint lead managers, and Deutsche Bank and ING Bank as joint lead managers.
ABN AMRO, Commerzbank, Lloyds Bank, NatWest Markets, Rabobank and SMBC Nikko were passive bookrunners.
The issue was two and a half times oversubscribed.
In order to implement the sustainable energy policies of the Netherlands and Germany, drive the energy transition and carry out large-scale maintenance work on its high-voltage grids, Tennet’ s annual investments are expected to grow from approximately €2-3bn today to approximately €4-5bn within the next five years.
The majority of Tennet’ s investments are directly related to the increase in renewable energy sources, such as wind and solar energy.
In the period up to 2030, the grid operator expects to have realised approximately 28GW of connection capacity for offshore wind farms in the Dutch and German parts of the North Sea, transmitting an amount of electricity sufficient to power 38 million households for a full year.