Enel has signed its first revolving credit line linked to the achievement of the UN Sustainable Development Goals (SDGs), an “SDG-Linked” loan agreement in the amount of 1 billion euros with a 5-year term, with global banking and finance company UniCredit.
The new credit line and the world’s first SDG-linked bond programme launched by Enel in September, are intended to expand and diversify Enel’s sources of sustainable financing.
This new approach to financing is part of the company’s strategy of creating value through the integration of the SDGs into the Group’s business model, a strategy that has contributed to Enel’s growth and the reduction of its risk profile.
In its current Strategic Plan, Enel has focused on creating value through business choices that support the pursuit of the following four SDGs:
- SDG 7 “Affordable and clean energy”, with over 11.6 GW of additional renewable generation capacity;
- SDG 9 “Industry, innovation and infrastructure”, with over 46.9 million smart meters installed and 5.4 billion euros of investment in innovation and digitalisation;
- SDG 11 “Sustainable cities and communities”, with retail investment and new electrification-oriented energy services to achieve, among others, 9.9 GW of demand response capacity and 455,000 charging points for electric mobility;
- SDG 13 “Climate action”, with a commitment to reduce carbon dioxide emissions to below 0.350 kg/kWheq in 2020 and full decarbonisation by 2050.
The new credit line made available by UniCredit is intended to meet Enel’s ordinary financing needs, and is linked to the Group’s ability to achieve, by December 31st, 2021, a percentage of installed renewable generation capacity (on a consolidated basis) equal to or greater than 55% of total consolidated installed capacity. As of June 30th, 2019, the figure was already equal to 45.9%.
Based on the achievement of this objective by the target date, the credit line provides for a step-up/step-down mechanism that will impact the interest spread applied to drawings on the line and the commitment fee for any unused portion of the credit facility.
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“With this innovative credit line, we are progressing along our sustainable finance path linked to the achievement of the Group’s decarbonisation targets, in line with the United Nations Sustainable Development Goals,” said Enel CFO Alberto De Paoli.
“The emergence of financial instruments that reward environmentally responsible behaviour is a further confirmation of the validity of the equation that links sustainability to value creation. Looking ahead, instruments of this type will increasingly be used in the implementation of the Group’s financing strategy.”