Global energy and electricity provider Iberdrola announced that it has raised €750 million in a new green bond offering, its first – and the first by any Spanish company – to be issued under the new European Green Bond (EuGB) standard.
Iberdrola noted that the bond was also the first ever to comply with both the EuGB standard and the Green Bond Principles of the International Capital Market Association (ICMA).
Iberdrola noted particularly strong demand for the green bond, which was 5x oversubscribed, drawing an order book of more than 3.7 billion euros – the company’s largest book for a senior transaction since 2021 – and with more than 170 investors participating in the transaction.
Adopted by the EU in November 2023, and taking effect in December 2024, the EuGB regulation was launched by the European Commission to establish a “gold standard” for green bonds, in order to combat greenwashing and advance the sustainable finance market in the EU.
Under the regulation, all proceeds from instruments issued under the new EuGB designation are required to be invested in economic activities that are aligned with the EU Taxonomy, although the rules include a flexibility pocket enabling 15% to be invested in economic activities that comply with the taxonomy requirements, but in sectors that don’t yet have established taxonomy criteria, with issuers clearly explaining where these funds will be allocated.
In addition to the investment rules, companies issuing bonds under the EuGB designation are required to follow strict transparency criteria, including disclosing how the proceeds from the bonds will be used, as well as committing to a green transition plan, and reporting on how the investments contribute to those plans.
Iberdrola is one of the largest corporate issuers of green bonds, using the instruments to fund projects including renewable energy, energy efficiency, clean transportation and waste management.
The company announced plans in 2021 for its financing structure to have an increasingly higher percentage of green and sustainable products, estimated to account for nearly two-thirds of its debt by 2025. In 2024, 94% of the financing signed by the company was sustainable, with the group’s sustainable financing as of the end of 2024 exceeding €60 billion, including €22.9 billion of green bonds, €15.6 billion sustainable credit lines, and €6 billion sustainable commercial paper, in addition to green and sustainable bank loans, and green structured finance and multilateral loans.
The company said that proceeds from the new offering will be used for renewable projects, including some already in operation and others under construction.
