Client Stories

TenneT powers market with record Green bond

Lighting the way ahead together

As the first cross-border transmission system operator (TSO), TenneT provides a secure supply of electricity to more than 42 million end-users in the Netherlands and in a large part of Germany through its 24,000km of high-voltage connections. 

TenneT is investing heavily in the energy transition in Europe, with annual planned investment in renewable energy connection expected to grow to at least €6 billion by 2025. By around 2030, TenneT expects to have realised at least 38 Gigawatt (GW) of offshore wind capacity connected in the Dutch and German parts of the North Sea.

The TSO, which has over 6,000 employees, is also Europe’s largest corporate Green bond issuer, having raised more than €16 billion of Green debt across public bonds, hybrids, private placements and through “Schuldscheine” since 2015.

TenneT leaps ahead with EU Green Bond Standard- and EU Taxonomy-aligned Green Financing framework

Looking to align its Green Financing Framework, with the EU Taxonomy and the proposed EU Green Bond Standard (EU GBS), TenneT asked NatWest to advise and guide them through the necessary modifications.

Closely collaborating with TenneT, the NatWest team undertook the following tasks:

  1. Performing a comprehensive GAP analysis of TenneT’s existing framework against key EU GBS requirements and to confirm alignment with the EU Taxonomy
  2. To ensure transparency about how TenneT’s green projects align with the EU Taxonomy, NatWest proposed a number of ways TenneT could include details about their projects meeting the EU’s Technical Screening Criteria
  3. Identifying the relevant ‘Do No Significant Harm’ criteria and existing, supporting policies that should be incorporated into the updated framework
  4. Updating the framework based on steps 1-3 as well as taking on board feedback from TenneT’s internal stakeholders about necessary framework modifications
  5. Reviewing comments from Second Party Opinion (SPO) provider, ISS ESG, on TenneT’s framework and further clarifying certain elements of the framework to achieve an optimal outcome for TenneT.

TenneT issues largest ever ESG corporate transaction in the EUR market

Following the publication of its updated framework, TenneT again sought to tap into the sustainable finance market with a Green Euro benchmark 4–tranche deal and asked the NatWest team, who had shortly before hosted TenneT’s non–deal related investor roadshow to support the new transaction in the role of Active Bookrunner.

Orderbooks grew steadily to reach over €9 billion across all tranches, which allowed TenneT to tighten spreads across all four tranches, with the largest price tightening for the 4.5-year tranche, which saw the highest demand. 

The four tranches included a €1,250 million 4.5-year Green bond with a coupon of 1.625%; a € 1,000 million 7.5-year Green bond, with a coupon of 2.125%; a €750 million, 11-year Green bond with a coupon of 2.375%; and a €850 million, 20-year Green bond with a coupon of 2.750%. 

Achieving several triple digit orders and a diverse investor base, this transaction represents the largest ever ESG corporate transaction in the EUR market and the largest EUR corporate transaction YTD. 

Proceeds of the transaction will be used to invest in eligible green power transmission projects in the Netherlands and Germany, focused on connecting large-scale offshore wind farms to the onshore electricity grid, and on investments in the onshore transmission grid to increase the transmission of renewable energy.

The backbone of a secure, reliable zero-carbon energy system

Gerard Kits, Head of Treasury, TenneT, said: “We are very pleased to have aligned our Framework with the EU Taxonomy and to have incorporated features of the EU Green Bond Standard. We see this as a best-in-class approach to support our important contribution to meet national climate targets and connect everyone to a brighter energy future. NatWest were very helpful in guiding us through this process, and their expertise enabled a successful outcome.”

Thomas Hansson, Corporate Financing and Risk solutions, NatWest, commented: “We are delighted to have been able to support TenneT with their Green Euro benchmark, achieving another record [1] deal as investors continue to have confidence in the quality and resilience of TenneT’s sustainability and credit story. This transaction marks the tenth deal for TenneT that we have supported, and we are proud to contribute to the net zero transition by supporting companies such as TenneT.”

Arthur Krebbers, Sustainable Finance Corporates, NatWest, added: “It was a great pleasure to have had the opportunity to guide TenneT through the update of their framework, highlighting TenneT’s position as a sustainability leader and early mover in aligning its disclosure with EU GBS and EU Taxonomy requirements. Sustainability is of paramount importance to our business, our customers and the economies we operate in, and we continue to proactively support those on their journeys towards sustainable operations and those, such as TenneT, helping others to become more sustainable.”

[1] SourceBloomberg and Dealogic (20/05/2022)



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