Enel agrees on an 5,8 billion kr. sustainability-linked general purpose financing with EKF and CITI
EKF, Enel and Citi have agreed on a facility of 5,8 billion kr. (USD 800 million) to support the Enel Group’s sustainable investments. The facility is made possible by the purchasing relationship between Enel and select Danish exporters and represents EKF’s first sustainability-linked general purpose financing
The Enel Group has received a facility from Denmark’s export credit agency, EKF, for up to 5,8 billion kr. (USD 800 million). The facility, arranged by Citi, is based on the Group’s worldwide business relationship with Danish suppliers and is aimed at supporting the development of wind energy as well as mitigating the effects caused by climate change, as part of Enel’s 2040 Net-Zero ambition, through a flexible instrument.
This agreement represents EKF’s first sustainability-linked general purpose financing, and, as part of the agreement, Enel Finance America LLC, a subsidiary of the Enel Group, is benefiting from the ability to make a significant upfront drawdown with a first tranche in October 2022 and the remainder with a second tranche to be utilized early in 2023; both amounts supporting the development of Enel’s strategy to increase investments in wind, helping to lead the energy transition towards decarbonization.
EKF and Citi
Under the agreement, EKF is the Lender and Citi acts as Mandated Lead Arranger, Facility Agent and Counter-Guarantor to EKF.
"The facility constitutes the latest milestone in Enel’s journey to innovate sustainable finance, especially in the international public finance domain. The facility gives us greater flexibility, allowing Enel to tackle climate change challenges as well as supporting the energy independence of the countries where we operate,” said Enel CFO, Alberto De Paoli.
”We have been working on extending our cooperation with Enel and this was the perfect opportunity. We are pleased to have finalized this deal, which supports a large portfolio of wind projects with a total generation capacity of more than 1.5 GW. The facility affords Enel the flexibility it requires to implement wind energy at a world leading scale and we are happy to play a part in that. Furthermore, today is a milestone for EKF in that the transaction represents our first sustainability linked loan. We really appreciate the relationship with Enel and the fact that they use Danish exporters to fulfill their important mission,” says Peter Boeskov, EKF´s CCO.
“Citi is pleased to have been able to work with Enel and EKF in concluding this innovative ECA financing which aligns with Citi’s sustainable finance goal to accelerate the transition to a low-carbon economy,” said Citi Managing Director, Alex Taylor.
In line with bond principles
The 5,8 billion kr. facility is linked to Enel’s ability to achieve its target for direct greenhouse gas emissions (Scope 1), measured in grams of CO2eq/kWh, equal to or below 140 gCO2eq/kWh by 2024, thus contributing to United Nations Sustainable Development Goal (SDG) 13 (Climate Action). The margin definition is linked to the value of Enel’s sustainable strategy and it embeds an upfront sustainability discount. Moreover, the loan includes a step-up mechanism that will trigger a margin adjustment in case the target is not achieved.
The transaction is in line with Enel’s Sustainability-Linked Financing Framework, updated in January 2022, which fully integrates sustainability into the Group’s global financing program. Moreover, the framework is in line with the International Capital Market Association (ICMA)’s “Sustainability-Linked Bond Principles” and with the Loan Market Association (LMA)’s “Sustainability-Linked Loan Principles”, as verified by the second-party provider V.E.