Gasunie to use green financing for its energy transition projects

Yesterday, N.V. Nederlandse Gasunie successfully issued its first green bond, a loan for € 300 million with a maturity of 9.5 years. There was strong interest from the market, leading to an oversubscription of more than five times. Gasunie intends to use the proceeds to finance part of its ambitious energy transition projects, such as the construction of the national hydrogen grid. Gasunie is the first gas TSO in the eurozone to issue a green bond.

Gasunie currently expects to invest more than € 5.5 billion up to the end of 2030 in new infrastructure for the transmission and storage of ‘renewable gases’, such as hydrogen, captured CO₂, heat and green gas. Part of the financing requirement will be covered by grants and Gasunie’s equity. For the remainder, Gasunie intends to issue green bonds on a regular basis over the coming years.

The first projects from Gasunie’s energy transition strategy are now entering the implementation phase. Recently, the first ground was broken for the national hydrogen network in Rotterdam. The green light has also been given to Porthos, through which Gasunie and its partners will facilitate the large-scale transmission and storage of CO₂. In the meantime, Gasunie is building the WarmtelinQ pipeline to bring residual heat from the Port of Rotterdam to homes and businesses in and around The Hague and Leiden.

Gasunie’s CFO and acting CEO Janneke Hermes says, ‘We believe that making green investments also calls for a green method of financing. In recent years, we have made several financing instruments greener by linking them to sustainability goals. Now that many of the energy transition projects we are carrying out on our own or with partners are materialising, it’s time for the next step. I am very pleased with the investors who have shown so much interest and who have made this transaction a success. I see this result as a sign of confidence in our financing strategy.’

The proceeds from a green bond may only be used for ‘green’ spending purposes, and the company must keep a record of these transactions in a special register. The Gasunie green bond complies with the provisions of the ‘Green Financing Framework’ that Gasunie published this month.

This Framework in turn complies with the ICMA Green Bond Principles and the European Green Bond Standard approved by the European Council in October 2023. This has also been confirmed by ICS, which carried out a second party opinion assessment. ICS also confirmed that the Framework is aligned with the EU Taxonomy’s ‘Substantial Contribution to Climate Change Mitigation’ and ‘Minimum Safeguards’ criteria, and almost completely with the ‘Do No Significant Harm’ criteria. The Framework was also deemed to be in line with the criteria of the recently approved European Green Bond Standard. The Framework and the second party opinion can be found on the website.

Gasunie’s inaugural green bond has a coupon interest rate of 3.875%. Investors in this green bond are largely based in the Netherlands, Germany and France. The majority of the buyers can also be categorised as green investors, a clear sign that they appreciate Gasunie’s energy transition strategy. The bond was oversubscribed more than 5 times in total, with over 120 parties expressing their interest. The green bond will be listed on Euronext Amsterdam.