Renewable Energy Finance: TenneT issues €3 billion green bond for the development of transmission projects in Netherlands, Germany

published on 21 October 2022
Renewable Energy Finance. TenneT. ABN AMRO. Deutsche Bank. HSBC. ING. Rabobank. SMBC. Netherlands. Germany. Europe. October. 2022.-kygpw

TenneT has launched and priced a green bonds in four tranches, split as:

– €650 million for a tenor of 6 years and a coupon of 3.875%;

– €500 million for a tenor of 9.5 years and a coupon of 4.25%;

– €1 billion for a tenor of 12 years and a  coupon 4.5%; and

– €850 million for a term of 20 years and a coupon of 4.75%

ABN AMRO, Deutsche Bank, HSBC, ING, Rabobank and SMBC acted as joint-active bookrunners for the issuance. The proceeds will be used to invest in green transmission projects in the Netherlands and Germany, focused on connecting large-scale offshore wind farms to the onshore electricity grid. The raised funds will also be deployed towards enhancements of the onshore transmission grid, with the primary objective of increasing renewable energy transmission.

The issuance makes TenneT one of the largest green bond issuers in Europe, and follows similar moves made by the company over the last 3 years. In May’22, TenneT issued a €3.8 billion quadruple-tranche green bond with a minimum tenor of 4.5 years and a maximum tenor of 20 years. The coupon rates ranged from 1.625% for the bonds maturing the earliest, increasing to 2.75% for those maturing the latest.

The company also launched multi-billion euro bond issuances during 2019-2021, bringing its gross proceeds raised through green bonds to more than €12 billion. 

During the next decade, TenneT plans to build 4,000 km of additional onshore grid connections in Germany and ~1,250 km onshore grid connections in the Netherlands. Further, by 2030 the company expects to invest €30 billion to connect ~40 GW of installed offshore wind capacity in the Dutch and German North Sea. Germany, the Netherlands, Denmark, and Belgium seek to install at least 65 GW of offshore wind energy cumulatively by 2030. TenneT seeks to align its investment strategy with the forecasted buildout of renewables, to serve as a major support system for Western Europe’s decarbonization.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation. 

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