Headquartered in Denmark, Ørsted provides pioneering energy products to its customers around the world while developing, constructing, and operating offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants too. Ørsted has been ranked amongst the world’s most sustainable energy companies in the Corporate Knights Global 100 Index since 2019 and is recognised on the CDP Climate Change A List as a global leader on climate action. Ørsted, was also the first energy company in the world with a science-based net-zero target, as validated by the Science Based Targets initiative (SBTi), and a signatory to the UN Sustainable Ocean Principles which provide a framework for responsible business practices across ocean sectors and geographies, serving as a common reference point on ocean sustainability.

One of Ørsted’s strategic priorities is to deliver a sustainable renewable energy transition that also generates a positive impact on nature and biodiversity with a clear contribution to the UN Sustainable Development Goal #14. Ørsted aims to have all new renewable energy projects, starting from 2030, yielding a net-positive impact on biodiversity. This implies that Ørsted not only seeks to evade, mitigate, and compensate for any adverse effects on the environment throughout the lifespan of the projects, but also actively strives to restore and augment ecosystems. For example, Ørsted is exploring the potential benefits of 3D-printed reefs for increasing biodiversity.

In addition, Ørsted has launched several partnerships to support its ambition. For example, a five-year global partnership with WWF, the World Wide Fund for Nature, aim to set a new standard for biodiversity protection and restoration in offshore wind development. Together, we will identify, develop, and advocate initiatives and approaches that can enhance ocean biodiversity. Read more here.

Building on Ørsted’s strong record in sustainable green finance and sustainable ocean-climate action, the company started exploring how to further contribute to the sustainable finance market through Blue Bonds. Introduced in 2018, Blue Bonds are specifically designed to raise capital for projects that support the blue economy focusing on the sustainable utilisation of ocean resources to drive green energy growth while preserving the integrity of the marine ecosystem. To support the development of this market, the IFC^[1] – a member of the World Bank Group, published the Blue Finance Guidelines in January 2022 which helps identify eligible blue project categories to guide investments to support the blue economy, in line with the Green Bond Principles and Green Loan Principles.

Deciding that the time was right, Ørsted – who were keen to be the first energy company to issue a Blue Bond – turned to NatWest to support the transaction in the role of Sole Arranger. We have advised Ørsted with sustainable debt issuances in the past, including a multi-tranche EUR Green Bond at the beginning of this year, and a dual tranche EUR Green Bond in 2022.

On World Ocean Day (8^th June 2023), Ørsted issued a 5-year, €100 million privately placed Blue Bond, with the proceeds going towards financing initiatives that specifically target offshore biodiversity and sustainable shipping. For offshore biodiversity, Ørsted will undertake various measures to mitigate, conserve, restore, and pilot new techniques, including artificial habitat restoration, with the goal of ensuring a net-positive impact on ocean biodiversity from all new renewable energy projects commissioned from 2030 at the latest. For sustainable shipping, the company aims to play a leading role in the development of sustainable fuels and through them decarbonise ocean vessels. 

Daniel Lerup, Ørsted’s Chief Financial Officer, said: “We are currently witnessing a substantial funding gap for sustainable ocean action. As pioneers in the industry, we believe the moment is right to introduce blue bonds, which are in a similar position to where green bonds were 10 years ago. Furthermore, we are seeing strong interest from investors who recognise the chance to align their investment strategies with sustainability objectives, diversify their portfolios, tap into growth sectors, and make a positive impact. Blue bonds offer investors a way to support the blue economy, conserve marine resources, and potentially achieve financial returns.”

Ingrid Reumert, Ørsted’s Head of Global Stakeholder Relations, added: “We are determined to leave nature in a better condition than we found it. However, there are new challenges that need to be tackled to achieve our ambitions. We firmly believe that collaboration is essential for achieving greater success – collaboration to identify the appropriate solutions and to facilitate and incentivise their implementation. By launching blue bonds, we are confident that we can take a significant stride towards achieving this objective.”

Robert Begbie, CEO of NatWest Markets, stated: “With natural capital becoming the new frontier of sustainable finance, there is a need to scale up blue finance. Through its inaugural issuance, Ørsted shows leadership in this area. We look forward to a virtuous circle emerging around Blue Bonds, where enhanced issuance improves market focus and understanding, thereby resulting in greater investor appetite and further supply by a growing issuer base.”

Chairman Harmen van Wijnen of ABP, APG’s Asset Management’s largest client is excited about the prospect of contributing through the investment in Ørsted’s inaugural blue bond to the restoration and protection of marine life, saying: “As a long-term responsible investor, we believe it is our societal responsibility to contribute to the protection and restoration of biodiversity and the rebuilding and strengthening of natural eco-systems. Reducing negative impacts of our investments on biodiversity and allocating capital to investments that achieve positive impacts are therefore a key component of our sustainable and responsible investment policy.”

“We are proud to be the largest cornerstone investor in Ørsted’s inaugural blue bond. The introduction and broad application of innovative solutions to minimize the negative impacts of human activity at sea, including offshore windfarm construction, is crucial for achieving the Paris climate goals while at the same time combatting the biodiversity crisis. We strongly believe this investment is a great opportunity, both in terms of its positive ecological impact and its risk and return prospects for our beneficiaries.”

Glossary:

[1] International Finance Corporation