Green Bonds? These “green” financial bonds channel financing towards investments in energy transition in a completely transparent way. EDF is itself a Green Bond issuer; in fact, it's among the most important on the market.
The fight against climate change requires investments. One solution is Green Bonds. These “green” financial bonds channel borrowed funds towards investments in the area of energy transition in a completely transparent way. But did you know that EDF is itself a Green Bond issuer?
Green Bonds: a new approach to finance
To finance environmentally-friendly infrastructure and equipment projects, you need to attract investors. Not so easy in a crisis period! That's where Green Bonds come in. They’re different from conventional bonds in that they involve a two-fold commitment: a commitment to allocate raised funds to green projects, and a commitment to transparency via a monitoring system that proves that the raised funds have indeed financed the expected actions.
Financing sustainable development
With a Green Bond, an investor chooses to support projects that contribute to sustainable development and meet a certain number of environmental and social criteria. This kind of capital raising has usually been done by the World Bank, the European Investment Bank, and the African Development Bank.
But in 2013, EDF took the innovative step of becoming the first large company to issue a green bond. The results: 1.4 billion euros raised, which have helped to finance 13 renewable energy projects. These were all executed by EDF Energies Nouvelles. The projects included building wind farms in the Pyrenees, Texas, and Quebec, and opening photovoltaic plants in California.
Two new EDF Green Bonds for an unparalleled sum
In 2015, the company launched its second Green Bond issue of 1.25 billion dollars, and its third in 2016 for 1.75 billion euros, which was to date the largest Green issue a company had made in euros. Finally, in early 2017, EDF became the first industrial actor to issue a Green Bond in yen. This adds up to a total of €4.5bn in Green Bonds issued by EDF to support its development in the area of renewable energies.
More projects eligible for investment
In 2016, EDF broadened the field of investments eligible for Green Bond financing. In addition to wind and solar projects (which are already eligible), investments to renovate and modernise hydro-electric facilities in mainland France managed by EDF’s hydraulic division are now eligible. In this way, EDF Green Bonds support the Group’s strategy, dubbed Cap 2030, which aims in particular to double net renewable output to push it past 50GW by 2030.
Transparency and traceability in investments
The Group is confirming its level of commitment as a regular “Green” issuer, contributing to growth and liquidity on this market and increasing visibility for investors who take part. Indeed, EDF has partnered with the rating agency Vigeo, which evaluates projects’ environmental and social eligibility criteria, and with the Deloitte firm, whose role is to certify the use of funds. By committing to showing statutory auditors that projects meet the criteria, EDF is able to guarantee to investors that projects respect human rights, the environment, and the health and safety of employees, suppliers, and local stakeholders. So that investors can measure the impact of funds entrusted to EDF, the Group also regularly publishes information on the management of collected funds, the different types of projects being financed, and their benefits in terms of avoided CO2 emissions.