RTE takes its first steps on the green bonds market

Posted on Jan 7, 2022, 1:35 p.m.

It’s a first. And a way to mark the role that the Electricity Transport Network (RTE) intends to play in the fight against global warming. The operator of the French electricity grid on Wednesday issued an inaugural green bond of 850 million euros.

“Unlike most of our large European counterparts, we had not set up green financing, apart from a few loans from the European Investment Bank,” underlines Laurent Martel, managing director of the finance, purchasing and risks division of RTE. It seemed important to us to be active in this market, especially since we are resolutely committed to the energy transition as shown in the Futurs Energétiques 2050 report that we published last October. With this transaction, RTE has therefore started to catch up with the British National Grid, the Italian Terna and the German Tennet.

To put all the chances on its side, RTE has chosen unmistakably green projects as beneficiaries of the funds raised. Two main categories are concerned: the electrical connection of new offshore wind farms (in particular at Saint Nazaire, Dieppe-Le Tréport or Noirmoutier) and the interconnection with the networks of other European operators. “This makes it possible to make the European electricity network more resistant to the development of renewable energies and in particular to their intermittence”, specifies Laurent Martel.

No nuclear

Not only will these two types of projects require significant investments – 7 billion by 2035 for offshore wind and 2 to 5 billion for interconnections – but they were also easier to “sell” to investors. Likewise, the gains in CO2 emissions were more easily quantifiable. On the other hand – even for the next obligations – there is no question of including potentially controversial projects in the “green” universe, such as the connection of new nuclear capacities.

The group’s green bond issuance framework was inspired by market standards, but also by the very recent European green taxonomy, which is more demanding. It has been verified by the environmental rating agency Vigeo Eiris. An evaluation of the use of funds will be carried out after one year.

The operation convinced market players, with demand representing four times the amount offered. “In addition to the usual large managers, we have attracted new investors,” says Laurent Martel. Especially the Nordics, very sensitive to environmental issues. The securities, with a maturity of 12 years, will post a yield of 0.84%. A cost deemed entirely satisfactory by RTE.

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