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Vattenfall issues SEK 3.5 billion in green hybrid bonds

By: Tom Russell 26/05/2021 Vattenfall

General Windfarms

Vattenfall has successfully priced and settled SEK 3.5 billion of green fixed and floating hybrid bonds. The proceeds will finance investments that contributes to Vattenfall’s goal of enabling fossil-free living within one generation. Vattenfall has also repurchased SEK 2.8 billion of the outstanding SEK 6 billion hybrid bonds.

This is Vattenfall’s first hybrid capital under the Green Bond Framework, published in 2019, where proceeds from the bonds are earmarked for investments in renewable energy and related infrastructure, energy efficiency, electrification of transport and heat as well as industrial projects.

Vattenfall's CFO Kerstin Ahlfont commented on the new hybrid bonds: “I am pleased that our first SEK-denominated green transaction engaged so many Nordic investors that will now join Vattenfall in driving the energy transition forward.”

Green hybrid capital supports Vattenfall’s investment grade rating, reinforces the company’s sustainability commitment and provides cost efficient equity-like capital. In addition, the company stated the repurchase of SEK 2.8 billion in the tender offer further strengthens the balance sheet by replacing shorter dated hybrid bonds with longer dated notes.

Citi acted as structuring advisor and Citi, SEB and Swedbank as joint bookrunners on the bond issue.

Vattenfall is one of the biggest offshore wind developers in the world. It owns over 1.5 GW of offshore wind capacity across the UK and Europe. In The Netherlands, the company is developing the Hollandse Kust Zuid 1&2 and Hollandse Kust Zuid 3 & 4 which it secured in separate zero subsidy tenders in March 2018 and July 2019 respectively. Once fully operational, the two Hollandse Kust Zuid sites will have a combined capacity exceeding 1.5 GW and are anticipated to generate enough power to supply up to three million households with green electricity.

In Denmark Vattenfall is building the Kriegers Flak project in. The 604 MW offshore wind farm reached first power in February 2021, and turbine installation reached the half-way point earlier this month (April 2021). Kriegers Flak is expected to provide enough power to cover the annual electricity consumption of approximately 600,000 Danish households.

Also in Denmark, the company is developing the Vesterhav Syd & Nord nearshore wind farms. Vesterhav Nord will have a capacity of 180 MW and will consist of 21 SG 8.0-167 DD turbines, each with a rated power of 8.4 MW. Vesterhav Syd will have a capacity of 170 MW and will consist of 20 turbines. Combined, the projects will supply electricity equivalent to the annual consumption of 350,000 Danish households.

In the UK, Vattenfall is awaiting consent for its Norfolk Vanguard and Norfolk Boreas projects. The two arrays would have a combined capacity of 3.6 GW and could be operational from the mid-2020s. The projects' combined capacity is expected to meet the equivalent annual electricity demand today of 2.6 million UK households, almost 10% of UK household demand.

For more information on offshore wind farms worldwide, click here.

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Vattenfall issues SEK 3.5 billion in green hybrid bonds

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