Investors snap up TenneT’s € 1 billion Green Hybrid Bond

TenneT has issued a EUR 1 billion Green Hybrid Bond, from which the proceeds will be used to connect large-scale offshore wind to the electricity grid, with investors showing “keen interest” and the issue being 2.5 times oversubscribed.

On 15 July, the transmission system operator priced its EUR 1 billion Green Hybrid Bond issue with a coupon of 2.374% and a non-call period of 5.25 years. 

TenneT said the issue will further strengthen its balance sheet as it will receive 50% “equity credit” from the credit rating agencies, and that it will use the proceeds to invest in green projects in both the Netherlands and Germany to connect large scale offshore wind to the onshore electricity grid, as well as to enhance the onshore transmission capacity for renewable energy. 

“In order to implement the sustainable energy policies of the Netherlands and Germany, drive the energy transition and carry out large-scale maintenance work on our high-voltage grids, TenneT’s annual investments are expected to grow from approximately EUR 2 to 3 billion today to approximately EUR 4 to 5 billion within the next five years”, the company said.

TenneT expects to have realized around 28 GW of connection capacity for offshore wind farms in the Dutch and German parts of the North Sea in the period until 2030.

The Green Hybrid Bond transaction was supported by ten banks: BNP Paribas and HSBC as joint structuring advisors and joint lead managers, Deutsche Bank and ING Bank as joint lead managers and ABN AMRO, Commerzbank, Lloyds Bank, NatWest Markets, Rabobank and SMBC Nikko as passive bookrunners.