Engie is raising €2.75 billion in bond debt to finance green projects

2022 was a great year for Engie and 2023 already promises well to follow the same trend. This Friday, the energy company, which has a market capitalization of 31.65 billion euros, announced in a press release that it is issuing 2.75 billion euros of green bonds.

This amount was collected through three different loans: a one billion euro loan with an interest rate of 3.625% for a period of 7 years, a loan of one billion euro with an interest rate of 4% for a period of 12 years and finally a loan of more than 750 million euros. 20 years with an interest rate of 4.25%.

The issue pre-funds a significant portion of Engie’s financing needs for 2023 and strengthens the group’s liquidity. “, the energy company says in its press release undertakes to use funds only for financing projects that are sustainable, socially responsible and have a positive impact on the environment. »

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Facing this bond problem a great success », with « dthe total demand for the three tranches peaked at more than 9 billion euros “this allowed Engie to set prices” in line with secondary market levels, with no new issue premium, maintaining a strong oversubscription ratio (2.4x) “, indicates the group in the press release. Pierre-Francois Riolacci, Deputy Director General for Finance, said in a press release: are pleased with the great success of this new bond issue (…), especially considering that they have a long term of up to 20 years (…) This demonstrates the strong confidence of institutional investors in Engie’s strategy, as well as the strength of its credit ratios. as a leading role in green finance. »

Many projects have been signed in 2022

If Engie needs funds, it is primarily to develop key green energy generation infrastructures, which the energy company has signed up for through 2022.

A French group, for example, won a 2 gigawatt (GW) floating offshore wind farm project off the coast of California on December 8, equivalent to powering 900,000 homes. A subsidiary of Winds. Earlier in the year, Engie also signed an agreement with Renault to supply the Douai (North) site with geothermal energy. At the end of 2023, the energy company will start drilling to draw hot water (130-140°C) from a depth of 4,000 meters, to heat the station and machines, and to replace 70% of the gas or generate electricity. . Many projects require sufficient funds and justify a new bond issue of the energy company.

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An exceptional year for the energy company

Engie, which is about 24% owned by the French state, has issued 17.65 billion euros in green bonds since 2014, according to the company, which sees its turnover rise more than 85% to 69.3 billion euros in the first nine months of 2022. The group’s very good performance was mainly due to high energy prices.

This led the energy company to revise upward its profit forecasts for 2022 in early November. However, the amount of the new European solidarity contribution to the profits of the energy groups slightly dampened the group’s enthusiasm for 2023, a decision Engie estimates will have a positive effect. €1.2-1.5 billion impact on its operating profit This year. These measures are to be implemented in all Member States from 1 December 2022 to 30 June 2023 and will potentially be extended.

The group announced in a press release on December 20 that ” reserves the right to challenge taxes that, in its opinion, do not respect existing legislation and create unjustified discrimination between operators or technologies, particularly in Belgium and Italy. “. He reminds that in October the Council of the European Union ” emergency response rules to address rising energy prices With the application of “,” limiting the income from electricity generation using technologies “say” inframarginal “.

(via AFP)