A Billion-dollar Green Bond Whets French Railway Operator’s Appetite
French railway operator SNCF Reseau raised 1 billion euros ($1.1 billion) last week by issuing its second green bond. The bonds have a 17-year maturity and will pay a coupon of 1.875% annually.
“Thanks to a significant amount of eligible investments—between 1.5 and 1.8 billion euros per year—we wish to issue at least one green bond every year,” SNCF Reseau head Patrick Jeantet said. The capital raised by SNCF will be used to finance sustainable modernization and new project development.
In China, GCL-Poly Energy Holdings, the world’s largest solar wafer maker, said it was planning to issue 1.75 billion yuan ($254 million) in green bonds to finance construction of eight solar farms totaling 291 megawatts in capacity. Haitong Securities will serve as the lead underwriter of its bonds that will be listed on the Shenzhen Stock Exchange.
Green bonds activity in the first quarter has been dominated by sovereign issues and by corporations. The biggest bond, of $7.6 billion, was from the French government. Details of issuance in the first quarter, as well as projections from Bloomberg New Energy Finance, can be seen in the Green Bonds Monthly – March 2017.
S&P Global, meanwhile, said it is working on a new way of ranking bonds based on their impact on the environment, hoping that greener securities will command a premium to traditional ones once there are metrics to justify it. The company best known for its credit ratings will introduce a green scoring system next month. “Investors want to go beyond that binary classification of green and not green – to how green,” said Michael Wilkins, managing director of S&P’s infrastructure ratings.
Utilities are chalking out plans to be a part of the ongoing transformation of energy systems. In the U.S., they are opting to own their own solar farms instead of striking decades-long deals to buy just the power. NextEra Energy and Dominion Resources are among utility-owners that may build as much as 1 gigawatt of solar farms in regulated markets this year. “It’s a natural transition for us,” said Carmine Tilghman, senior director of energy supply at Arizona utility Tucson Electric Power. “The customer base wants us to move toward” clean energy.
NTPC, India’s largest power generator, is seeking to buy the federal government’s stake in hydro-power producer SJVN to boost its share of non-fossil fuel generation capacity, according to people with knowledge of the development. India’s 64.5% share in the hydro-power generator is valued at about 87.2 billion rupees ($1.3 billion), according to Bloomberg calculations. The purchase will help state-run NTPC meet its goal of reducing the share of its generation capacity that relies on fossil fuels to 70% by 2032 from about 97% now. It will also help the central government raise funds and narrow its fiscal deficit.
The development of coal power plants, the traditional mainstay of large utilities, has slowed down. Greenpeace, the Sierra Club and CoalSwarm found global pre-construction planning fell 48% and new construction starts dropped 62% in 2016 compared with 2015, according to a report published last week titled “Boom and Bust 2017: Tracking The Global Coal Plant Pipeline.” China’s clampdown on new coal projects and a reluctance by backers to provide funds in India are mainly responsible for the drop in the pipeline, it said.
The world’s biggest solar panel maker, JinkoSolar Holding, plans to bid to develop as many as 2 gigawatts of solar farms outside of China. The company is interested in projects in Latin America, Central and Western Africa, South and Southeast Asia and Middle East, Vice President Qian Jing said. The move will broaden revenue sources for the solar manufacturer facing falling panel prices.
Shunfeng International Clean Energy – which bought out Germany’s S.A.G. Solarstrom and Suniva of the U.S. – said it would have a shortfall of 2.4 billion yuan ($348 million) in 2016, wiping out the 58 million yuan of earnings it reported the year before, according to a statement to the Hong Kong Stock Exchange. The scale of the loss is bigger than the 923 million yuan it had said in January that it expected. The company’s final annual results are due in late March.
Hanwha Q Cells, a South Korean solar manufacturer, and Kalyon Enerji won a Turkish government auction to build and operate a $1.3 billion solar farm in central Turkey. The two companies bid 6.99 cents per kilowatt-hour in the March 20 auction, the Turkish ministry of energy and natural resources said on its website.
In Austria, the Federal Association of Electromobility, or BEOe, said it would lift the number of plugs it maintains for electric cars to 2,000 from 1,300 currently. The BEOe is composed of regional Austrian utilities including EVN, Wien Energie and Kelag Netz. “Our goal is to build 5,000 Austria-wide by 2020,” said Austrian Transport Minister Joerg Leichtfried, whose ministry has aided the network. The number of registered electric cars in Austria cracked 10,000 earlier this month. The Ministry of the Environment expects that figure to rise to at least 16,000 by next year. The government is offering subsidies of 10,000 euros ($10,790) to businesses installing fast-charging stations and 4,000 euros to consumers purchasing electric vehicles.
A second nationwide charging network operated by Smatrics is not a part of the BEOe initiative. Smatrics, owned by Siemens and Verbund, operates 380 high-speed plugs powered exclusively from the Alpine country’s hydropower reserves, according to its website.
South Korea said it would provide subsidies this year of up to 5 million won ($4,500) each to install more than 9,500 electric vehicle chargers nationwide.
In the storage sector, a unit of Macquarie Group tapped CIT Group to finance part of a $200 million portfolio of energy-storage systems it is developing in California, marking the largest battery project to get bank financing.
Scientists and wind industry experts in Denmark gained government approval to build and test offshore wind turbines that will rise higher than the Eiffel Tower. The masts will soar as high as 330 meters (360 yards), said Rasmus Bjoern, the spokesman for Denmark’s Energy, Utilities and Climate Ministry.
In France, presidential candidate Marine Le Pen said she opposes all wind power in France because turbines are ugly and harm the health of nearby residents.
Meanwhile, Electricite de France, the nuclear-energy giant facing falling revenue at home, is studying at least 1.1 gigawatts of clean-power projects in the Middle East to tap growing demand in the region. EDF is considering projects in Saudi Arabia and the United Arab Emirates, said Antoine Cahuzac, head of renewable energies at the utility. EDF is joining a group led by Abu Dhabi Future Energy Company to build an 800-megawatt solar plant in Dubai, it announced last week.
The deployment of solar continues to expand worldwide: Wartsila, a Finnish industrial-engine maker, agreed to develop a 15-megawatt solar farm in the West African nation Burkina Faso.
Total Green Bond Issuance by Bond Type -- 2016