Smart Energy Finances: Green and sustainability-linked bonds for 50Hertz and Eaton

Smart Energy Finances: Green and sustainability-linked bonds for 50Hertz and Eaton
Courtesy ESmart Systems

In this week’s Smart Energy Finances, successfully issued green and sustainability bonds for German TSO 50Hertz and power management company Eaton take the lead within a challenging market environment.

Additionally, a series of global smart energy partnerships strike interest as companies continue to double down with investments in this growing sector.   

50Hertz receives second green bond of €750m

Eurogrid GmbH, the parent company of transmission system operator 50Hertz, has secured liquidity for the further grid expansion necessary for the energy transition with the issuance of its second Green Bond in the amount of €750 million ($748.8 million).

This will finance selected projects on- and offshore, aiming to increase integration and transportation capacities for renewable energies in 50Hertz’ system.

According to Marco Nix, chief financial officer of 50Hertz, the bond was successfully issued “despite the weak and challenging financial market situation.”

The corporate bond with a term of nine years and an interest rate of 3.279% will be issued on the regulated market in Luxemburg with the support of Banco Santander, Mizuho Bank, Rabobank and UniCredit Bank from the circle of Eurogrid’s  core banks on September 5th. The investors mainly come from Great Britain, Germany, France and the Benelux countries.

After strengthening Eurogrid’s equity by a joint increase of the capital reserves for €250 million ($249.6 million) through the two shareholders, Belgian Elia Group S.A. (80 %) and KfW Bankengruppe (20%), and the confirmation of a BBB+ commercial and financial rating with a stable outlook by Standard & Poors, funding activities of the current year have been successfully accomplished early.

The Green Bond complies with the principles of the International Capital Markets Association (ICMA). An independent evaluation of the Green Bond Framework was carried out by the second party opinion provider imug Rating GmbH, Hanover.

With the Green Bond investments in the offshore grid infrastructure will be financed. Photo: Matthias Wilhelm / 50Hertz

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Eaton closes offering of sustainability-linked and senior notes

According to the power management company, the sustainability-linked notes offering represents a significant step in aligning their long-term financing structures with environmental targets.

The notes interest rate is subject to the achievement of a Sustainability Performance Target (SPT) to achieve at least a 40% reduction in absolute Scope 1 and Scope 2 GHG emissions by year-end 2027, relative to a 2018 baseline.

The sustainability-linked notes due 2033 and senior notes due 2052 were issued by Eaton Corporation and unconditionally guaranteed by Eaton Corporation plc and certain of its subsidiaries.

BofA Securities, Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, minority-owned bank Loop Capital Markets LLC, and Wells Fargo Securities, LLC acted as joint book-running managers for the offering and BofA Securities, Inc. also acted as sustainability structuring agent for the offering.

In addition to these joint book runners, the transaction included minority and veteran-owned firms Academy Securities, Inc., AmeriVet Securities, Inc., and CastleOak Securities, L.P. as co-managers.

eSmart Systems raises €40m for virtual infrastructure inspections

Norwegian company eSmart Systems has raised up to $40 million to develop virtual infrastructure inspections for power utilities.

The company is known for its Artificial Intelligence (AI)-based solution, Grid Vision, which aims to bolster the inspection and maintenance of critical energy infrastructure. The company has global customers including several of the world’s largest energy companies, such as Naturgy, Xcel Energy and E.ON.

The funds were raised in the recently completed Series B share issue from current investors, including Equinor Ventures, Kongsberg Group, Nysnø Climate Investments, Energy Impact Partners and Future Energy Ventures, together with the US-based investment fund manager, Arosa Capital.

The capital will be used to accelerate the company’s commercial development and international growth.

According to Princeton Environmental Research and Rystad Energy, the global energy transmission network is expected to triple in size, and over $18 trillion is to be invested by 2050 to reach net zero, creating massive growth opportunities for eSmart Systems.

Investment banks DNB Markets and Arctic Securities were financial advisors of the share issue.

The combined company employ 110 employees in Norway, Sweden, Germany, the Netherlands, the UK and the US.

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Smartenergy taps into C&I

Courtesy Smartenergy

Smartenergy has acquired a majority stake in Rewatt, a solar energy for self-consumption solutions provider.

The Swiss investment company and the Portuguese developer are joining forces to take advantage of the growth opportunities offered by industrial self-consumption and energy communities in Portugal and across Europe.

Smartenergy and Rewatt closed an agreement that makes the Swiss company the new majority shareholder of the Portuguese developer. Together they will expand the existing business of Rewatt and harvest the synergies between them.

The announcement came in as new regulations in Portugal enable business models with energy communities. This will be the second growth area for the newborn partnership, bringing green energy to a wider range of consumers through sharing communities.

The focus is currently mainly on Portugal but the two partners want to push expansion in Europe.

CLP and Venturous’ smart energy partnership in China’s Greater Bay Area

LP Group (CLP), an investor-owned power businesses in Asia Pacific, and Venturous Group (Venturous), an investor, business builder and operator of Smart Citytech infrastructure companies in China, announced a strategic partnership to develop smart energy technology businesses in the Greater Bay Area after CLP acquired a 5% stake in Venturous.

CLP and Venturous will explore business development opportunities and potential investments in smart energy technologies in the Greater Bay Area, a region including Hong Kong, Macau and nine cities in the southern Guangdong province, with a combined gross domestic product equal to more than a tenth of China’s economy.

The partnership combines the capabilities of CLP and Venturous in low-carbon energy and digitalisation to meet the growing demand for sustainable energy solutions in the fast-growing region.

While China emits more than a quarter of the world’s greenhouse gases, the Central Government is determined to make the country carbon neutral by 2060, acknowledging that technology will play a key role for decarbonisation

CLP became the lead investor in Venturous’ Series B funding round, which has attracted more than $20 million as of August 25 2022.

Venturous completed its previous Series A funding round in March 2021, raising $131 million. With the further funding, this is hoped to quicken the pace for the partnership between CLP and Venturous to realise regional decarbonisation opportunities.

For more updates on finance and investments within the energy industry, make sure to track and check our other editions of Smart Energy Finances Weekly.

Cheers,

Yusuf Latief

Content writer – Smart Energy International


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