Gasunie to use green method of financing for energy transition projects

Business & Finance

November 14, 2023, by Aida Čučuk

Dutch energy company Gasunie has issued its first green bond, a loan for €300 million with a maturity of 9.5 years, intending to use the proceeds to finance part of its energy transition projects, such as the construction of the national hydrogen grid in the Netherlands.

Gasunie revealed the company currently expects to invest more than €5.5 billion up to the end of 2030 in new infrastructure for the transmission and storage of renewable gases, such as hydrogen, captured CO2, heat and green gas. Part of the financing requirement will be covered by grants and Gasunie’s equity and for the remainder, Gasunie intends to issue green bonds on a regular basis over the coming years.

The proceeds from a green bond may only be used for ‘green’ spending purposes, Gasunie emphasized, adding that the company must keep a record of the transactions in a special register.

The Gasunie green bond is said to comply with the provisions of the ‘Green Financing Framework’ that the company published this month. In turn, the framework complies with the ‘ICMA Green Bond Principles’ and the ‘European Green Bond Standard’ approved by the European Council in October 2023.

This has been confirmed by ICS, which carried out a second-party opinion assessment, Gasunie noted, adding that ICS also confirmed that the framework is aligned with the EU Taxonomy’s ‘Substantial Contribution to Climate Change Mitigation’ and ‘Minimum Safeguards’ criteria, and almost completely with the ‘Do No Significant Harm’ criteria. Additionally, the framework was deemed to be in line with the criteria of the recently approved ‘European Green Bond Standard.’

Gasunie’s inaugural green bond has a coupon interest rate of 3.875% and its investors are largely based in the Netherlands, Germany and France, the company stated, noting that the bond was oversubscribed more than five times in total, with over 120 parties expressing their interest. The green bond will be listed on Euronext Amsterdam.

Gasunie’s CFO and acting CEO Janneke Hermes commented: “We believe that making green investments also calls for a green method of financing. In recent years, we have made several financing instruments greener by linking them to sustainability goals. Now that many of the energy transition projects we are carrying out on our own or with partners are materializing, it’s time for the next step. I am very pleased with the investors who have shown so much interest and who have made this transaction a success. I see this result as a sign of confidence in our financing strategy.”

To note, the first projects from Gasunie’s energy transition strategy are entering the implementation phase, the company said, highlighting the start of the construction of the national hydrogen network in Rotterdam.

From 2030, the national hydrogen network, which is estimated to cost around €1.5 billion to build, is expected to connect the Netherlands’ major industrial areas to each other and to Germany and Belgium.