2019 was the year of green bonds. The fascination of green bonds has increasingly infected the most innovative Italian companies and Terna is certainly one of them. He is in good company because, according to a report by Banca Imi, in 2019, new green issues in our country reached 5,4 billion euros, a figure almost double compared to the previous year, when the total amount reached 2,8 billion euros. In the "package", the report points out, there are "debutant green issuers" - such as Generali, A2A, Erg and Ubi - as well as "experienced" issuers that have already issued one or more green bonds in the recent past: Enel, Iren , State Railways, Hera and Terna itself. The global value of total green bonds currently in circulation - according to the IMI analysis - amount to approximately 11,4 billion euros.
GREEN BOND, A WORLDWIDE TREND
The data on Italy confirm this the current global trend: According to a Boston Common Asset Management study this year green emissions have in fact reached 250 billion dollars, for a total amount in circulation of 580 billion against the almost 2.000 billion collected on fossil fuels in the period 2016-18. The gap between the two emission models naturally persists, but the distances are rapidly closing and the green sector could be further favored by the Green New Deal European proposed by Ursula von del Read as one of the cornerstones of its program recently approved by the EU Parliament. A further push could also come from the new ECB management of Christine Lagarde, who intends to promote quantitative easing in a green key.
GREEN BOND, TERNA PUSHES ON SUSTAINABILITY
Overall, in just over a year – on horseback between 2018 and 2019 – Terna issued 1,5 billion green bonds. For what reason and with what strategy? “In fact, the issues of sustainable bonds – explains the CEO Luigi Ferraris – are 100 percent aligned with the industrial strategy pursued by Terna and, for a substantial percentage, they serve to integrate renewable sources into the system. These are funding sources that are fully aligned with the sustainability of our goals. In fact, when we talk about electric mobility, new green production sources and the energy transition, we often forget that all of this first of all requires an adaptation of the national transport infrastructure. Without this indispensable step, the word green risks remaining a goal devoid of real content".
But how “green” are corporate bonds actually? Terna explains it in a timely manner in Green Bond Report 2018 in which he lists point by point the emissions and projects, actually green, to which the financing requested from the market is linked. Funding requests are directed to three categories of goals: projects aimed at increasing production from renewable energies; those aimed at reducing CO emissions2 of the electricity system by reducing network losses; finally, those aimed at reducing land use and the impact on terrestrial biodiversity. The identification of projects eligible for the program (Eligible Green Project) is aligned with the Sustainable Development Goals (SDGs) of the United Nations and in particular with targets 7, 9, 13 and 15, aimed at improving access to energy, at innovative infrastructures, to combat climate change and to promote the sustainable use of the terrestrial ecosystem.
We started on July 16, 2018 with the issue of the first 750 million green bond with a duration of five years, reopened with a subsequent private placement of 250 million in January 2019. It then moved on to 3 April 2019 with an issue of 500 million, which received great favor from the market with a request for about 7 times the offer. The duration of the bond is 7 years and it pays a coupon of 1%, like the previous one.
2018% of the 750 green bond of 90 million was used to refinance 18 projects (or part of them) already underway and which range - to name just a few more well-known ones - from Sorgente-Rizziconi maxi power line between Calabria and Sicily (over 256 million), the reorganization e rationalization of the Milan, Rome, Naples and Palermo networks (over 72 million in total), the construction of the 150 kiloVolt line between Benevento and Montecorvino (52 million).
GREEN BOND, MORE CONNECTIONS TO RENEWABLES
Coming to the impact on the projects financed and coming into operation (for which the benefits generated or linked to the investments refer to the entire project, of which the bond financed a part), the works carried out served to connections to renewable plants for 1.802 MegaWatt, with an increase in green electricity production of over 3,9 million megawatt hours, a reduce network losses for an amount exceeding 611 megawatt hours and to build 59 kilometers of underground cables, replacing 198 kilometers of old and more polluting surface lines.
Going into more detail, to see for yourself what it means to allocate resources to green projects, it is worth mentioning projects that are also less known, but which conquer significant spaces, such as the new electrical station in Genzano di Lucania. In fact, the station will allow you to connect 24 renewable plants in Basilicata to the national transmission grid with an increase of over 2,29 million clean kilowatt hours/year released for consumption. The amount earmarked for the project, included in the 2018 bond, is 21 million, of which over 14 have already been assigned.
Moving instead from Basilicata to Campania, the reorganization of the network in Naples will absorb 10,7 million from the 2018 green issue, all already allocated, and will allow for a reduction in grid losses estimated at 17.700 megawatt hours.
