Dive Brief:
- German multinational energy company RWE launched its first green bonds in the United States last week. The company issued two sets of $1 billion bonds to fund renewable energy projects, one that matures in 10 years and another that matures in 30.
- The launch marks the renewable energy company’s first foray into issuing green bonds stateside, having previously issued similar bonds in the European market. RWE plans to become a “regular issuer” in both markets going forward, according to the company’s CFO Michael Müller.
- The renewable energy multinational said this was a strategic entry into the U.S. market, and it plans to issue $3-3.5 billion in green bonds annually in both euros and U.S. dollars until the end of the decade, according to the April 12 release.
Dive Insight:
RWE reported a high level of investor demand for green bonds, and said the bonds’ order books totaled $7.6 billion, an oversubscription of 3.8 times what the company was seeking. The company currently has 146 solar, onshore wind and battery storage projects located in the U.S. and plans to expand that portfolio, while it isalso looking to develop other technologies necessary for an energy transition like storage and green hydrogen, according to its website.
Müller said the renewable energy multinational, which has a goal to be carbon neutral by 2040, wants to invest 20 billion euros ($21.28 billion) by 2030 to expand its U.S. wind, solar and battery portfolio.
“With our first U.S. green bond, we are expanding our sustainable financing,” Müller said in the release. “The U.S. stands as our largest market outside of Europe where we have more than doubled our net installed capacity since 2020 to 9 gigawatts today.”
RWE invested $21.28 billion in renewable energies globally between 2021 and 2023, according to last week’s release. The company said it plans to invest another $58.54 billion globally in renewables, batteries, hydrogen and flexible generation projects by the end of the decade. RWE said it aims for its global capacity to surpass 65 gigawatts as a result of the investments.
The 10-year bond will yield investors 5.926% percent on their investment, at full maturity; the 30-year bond will have a yield-to-maturity ratio of 6.261%. RWE said the bonds will be issued in accordance with its Green Financing Framework, and proceeds will go toward its “Growing Green” investment and growth program.
The company updated its Green Financing Framework last year to comply with the European Union’s taxonomy for sustainable investments and other international sustainable financing frameworks. This update laid the foundation for its issuance of green bonds, RWE said at the time. The updated framework also expanded the types of projects eligible for green financing to include battery storage and green hydrogen projects.
