Enel touts €1bn green bond and bags 70% of Polish demand response market

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Enel Finance International NV, a subsidiary of Italian energy major Enel has placed its third green bond on the European market. The €1 billion issue is for institutional investors and backed by a guarantee from the issuer. The settlement date is on Monday.

The net proceeds of the issue – carried out under the Enel’s ‘€35 billion euro medium term note program’ – will finance Enel projects identified to be in accordance with the ‘green bond principles’ published by the International Capital Market Association.

According to Enel, eligible projects will include the development, construction and re-powering of renewable generation plants; the construction and management of power transmission and distribution grids, and smart metering systems; as well as the development and construction of mobility projects; energy efficiency; and demand response measures. The flow in capital is in line with a trend in the West to invest in downstream renewable projects.

In its strategic plan for 2019-2021, presented in November, Enel updated its green bond framework, stating it would facilitate transparency.  Since June 2017, Enel has had a green bond committee to oversee implementation of the framework and the allocation of issue proceeds.

Bonds will mature in 2025

Enel said the bond provides for repayment in a single instalment at maturity on July 21, 2025. Investors will receive a fixed rate coupon payment equal to 1.5% annually. The issue price has been set at 98.565% and the effective yield at maturity is equal to 1.736%.

The bond will be listed on the Irish and Luxembourg stock exchanges and is admissible for multilateral trading via ExtraMOT PRO, which is managed by Italian exchange Borsa Italia.

The company said the transaction received subscriptions of more than €4.2 billion. Enel said the transaction was led by Banca Akros, Banca IMI, BofA Merrill Lynch, Credit Agricole CIB, CaixaBank, Commerzbank, Credit Suisse, ING, JP Morgan, Mediobanca, Raiffeisen Bank International, Société Générale, UBI Banca and UniCredit Bank.

The Italian energy company also announced it has been awarded approximately 70% of Poland’s new capacity market for demand response, from 2021 to 2023. Enel X secured itself 446 MW of demand response capacity in 2021 and 546 MW in each of 2022 and 2023, in the first three capacity market auctions held in Poland.

Demand response portfolio

Enel has been active in the segment in Poland since 2017 and said the market would be a “fruitful new business opportunity” and a cost-effective solution for decarbonization, citing its experience in other regions. The company claims to be the global leader in demand response programs, with more than 6 GW of capacity managed in the Americas, Europe, Asia, and Oceania.

“Demand response and, more generally, the participation of the demand side in energy markets, continue to play a central role in all power systems striving for cost-efficiency and faster decarbonization,” said Francesco Venturi, head of Enel X.