Case study

Elia Transmission Belgium electrifies investors with inaugural Green Bond

10 Mar 2023 . 3 min read

Powering the decade of electrification

Assigned by a ministerial decree in January 2020 as the only Transmission System Operator (TSO) in Belgium for a 20-year period, Elia Transmission Belgium (ETB) operates over 8,896 km of lines and underground cables throughout Belgium.

ETB (BBB+ / stable) belongs to Elia Group, which also partly (80%) owns German TSO 50Hertz Transmission GmbH. Together, the TSOs supply power to over 30 million end-users (large industries & households), making it one of the top 5 leading TSOs in Europe.

As a key player for the energy transition, building interconnectors and integrating renewable energy generation in their grids, ETB has developed its sustainability strategy “Act Now”, which is based on the United Nations Sustainable Development Goals (SDGs).

In December 2021, ETB published its Green Finance Framework with the sole green project category of renewable energy – specifically, electricity transmission infrastructure and smart metering equipment. ISS ESG provided a Second Party Opinion (SPO), confirming the framework is aligned with the International Capital Market Association (ICMA) 2021 Green Bond Principles, the Loan Market Association (LMA) 2021 Green Loan principles, the EU Taxonomy Climate Delegated Act (June 2021), and the proposed European Green Bond Standard (July 2021). The Green Finance Framework was set-up to support one of the key dimensions of Elia Group’s Act Now programme: Decarbonisation of the energy sector and its own activities. Specific projects include integration of domestic renewable energy production and the integration of offshore wind production.

ETB’s 10-year €500 million Green Bond 5 times oversubscribed

Looking to return to the bond market after nearly three years with its inaugural Green Bond, ETB asked NatWest to support the debut transaction in the role of Active Bookrunner. ETB’s green bond debut follows other European TSO successful green bonds over the past few years, including TenneT, Amprion and 50 Hertz.

To familiarise investors with ETB’s sustainability strategy and the TSO’s credit story, the NatWest deal team helped organising a range of investors calls and investor meetings and helped produce an online NetRoadShow which was viewed by over 65 investors.

The direct dialogue paid off. When ETB announced a 10-year €500 million (Will Not Grow) Green Bond, orderbooks grew quickly to €2.5 billion, which allowed the company to tighten spreads. Investors from Germany, Austria, and Switzerland led demand, taking 28.2% of the allocation. French investors followed with 19.7% while investors from the UK and Ireland took 16.3%. Looking at investor types, asset managers represented by far the largest group with 82%, followed by pension funds and insurance companies (6.6%). More than 80% of the allocation went to investors with at least modest ESG commitments (58% with strong commitments and 25% with modest commitments); according to NatWest’s Investor ESG Scoring Tool.

NatWest committed to play key role in championing climate solutions

Lieve Kerkhof, Head of Finance, Elia Transmission Belgium, commented: “We are excited about the success of our inaugural Green Bond issuance, which was evidenced by investor confidence in our credit standing and our sustainability strategy, and ultimately helping with the urgent shift from fossil-based energy sources to electrification.”

Arthur Krebbers, ESG and Climate Capital Markets, NatWest, said: “We’re delighted to have had the opportunity to support ETB with their green debut. The success of this transaction is a clear testimony to the quality of the ETB and to the credibility demonstrated by the management during the investor calls and meetings. Climate is of paramount importance to our business, our customers and the economies we operate in, and hence it is our ambition to play a leading role in championing climate solutions.”

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