France launches the largest issue of Green Bonds

SNCF Réseau, the French railway infrastructure manager, rated Aa2 by Moody’s agency and AA by Standard&Poor’s and Fitch agencies, launched in March the latest Green Bonds issue worth EUR 1 billion with a duration of 17 years. It is the largest issue of this type of bonds carried out by a French company or agency and, specifically, the most important issued by a European company or agency with a duration of bonds that exceeds 12 years.

Climate bonds (or Green Bonds, as called by specialists) are financial instruments that bring fix revenues linked, to a certain extent, to climate change-tackling solutions. In essence, the Green Bonds are a new type of financial instrument that develops rapidly.
After the success of the inaugural issue of Green Bonds, launched in October last year, which enabled SNCF Réseau to become the first railway infrastructure manager and the first European transport company in the world to issue such bonds, at present, SNCF Réseau confirms its commitment to developing a green bonds market and an environmentally friendly transport system.
“This second issue of green bonds has been a financial success right from the start while also being a success from the point of view of sustainable development. The measure proves that SNCF Réseau has become a bond issue leader of green bonds. With a significant quantity of eligible investments of EUR 1.5 up to 11.8 billion a year, every year, we want to obtain at least one issue of green bonds”, pointed out Patrick Jeantet, Executive Board Chairman of SNCF Réseau.
Funds to be attracted due to this financial instrument will be assigned an account number and will be used, primarily, for the sustainable modernisation of the railway network, as well as for the development of new projects and for the consolidation of SNCF Réseau’s strategy in favour of biodiversity and protection of natural resources.
Loyal to the concept of additionality, the French railway infrastructure manager confirms that the financial resources obtained following the issue of green bonds will be exclusively dedicated to new infrastructure modernisation project and not to the refinancing of existing projects.
Railway transport is the most environmentally friendly mode of transport with minimum environment impact and helps meeting the objectives set by France in the fight against climate change. With a particularly low rate of greenhouse gas emissions, the railway system reduces the emission of such gases by 10 million tonnes of CO2 per year.
Green bonds are an important leverage in financing the transition towards protecting the energy and a more sustainable transport environment. All these features allow companies and public entities to finance environment projects, especially infrastructure investments.

by Elena Ilie

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