Ireland places first public green bond to raise €500 million for low carbon energy investment

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Solar projects will be eligible to apply for support from the proceeds of Ireland’s first public green bond.

State-owned utility the Electricity Supply Board (ESB) placed an 11-year, €500 million green bond on Tuesday and announced solar, as well as onshore and offshore wind generation projects, could receive backing from the proceeds. Electric vehicle charging infrastructure and onshore wind network connections would also be eligible for support confirmed the ESB, which was able to offer the bond at a record low rate of 1.125% after targeting substantial European institutional investors.

The placement was managed by Danske Bank, JP Morgan, BBVA and Société Générale.

The bond, which will mature in June 2030, will help Ireland reach its climate change goal of sourcing 70% of its energy generation from renewables by that year.

An effective tool

ESB group finance director Pat Fenlon said on Tuesday: “Today ESB issued Ireland’s first corporate public green bond, for €500 million, the proceeds from which will be used to finance projects which will facilitate the transition to a low carbon energy future and help Ireland to meet its ambitious climate change targets … The interest shown by investors from right across Europe in this our first green bond demonstrates confidence in ESB’s investment program to lead the transition to a low carbon energy future.

“In line with our Brighter Future 2030 strategy, ESB continues to focus on producing clean, secure and affordable energy, delivering smart, reliable, resilient networks to enable the connection of more renewable generation and developing energy services to meet evolving market needs. We are developing a pipeline of projects across a range of technologies including onshore and offshore wind and solar as well as investing in the electric vehicle charging infrastructure. These significant investments will position ESB as a leader in the transition to a low carbon energy future. Green bonds are an effective tool for investors to channel funds into assets and projects which have a positive and demonstrable climate change impact.”

Green bonds are becoming increasingly common around the world as investors start to press for action to combat climate change. Two €500 million bonds were placed by China Construction Bank Corporation and the European Investment Bank in October, on the new Luxembourg Green Exchange platform developed by the principality’s bourse.

Having announced plans to raise €4-6 billion for sustainable investment in the first round of a series of annual green bond placements last month, the government of the Netherlands received more than €21 billion worth of orders to fully subscribe the 20-year investment.