Natixis CIB awarded « ESG Infrastructure Bank of the Year » in the IJGlobal ESG Awards 2021
Could Infrastructure keep up with a rapidly changing world? The answer is yes, this award is a testimony and a lot of clients are engaged to take the lead of this transition.
The Infrastructure & Energy Group, a strategic sector of Natixis CIB, fully embraces this diligent ESG focus with a significant portion of our activities related to:
- renewable power;
- green projects (e.g. data centers, district heating projects fed with green-sourced power); and
- carefully monitored nascent sub-sectors (e.g. green hydrogen and carbon capture).
It is important to note that:
- our Originate-to-Distribute model has resulted in a recurrent distribution of our financing commitments to NBFIs who also have stringent ESG requirements;
- in 2020, our Infrastructure Finance and Energy & Natural Resources groups were merged with the objective to (i) accompany our O&G clients in energy transition and (ii) further focus our Metals & Mining activities toward energy transition assets (e.g. metals related to batteries).
- 1 of the 3 pillars of our recently-announced strategic plan for Natixis CIB is to be our clients’ “go-to financial partner” for their energy transition.
- And Natixis CIB set up as early as in 2017 its Green & Sustainable Hub (GSH) with a view to coordinating the bank’s solutions and expertise on green and sustainable financing products across all asset classes in a unique centralized set up.
Thanks to all our clients and in particular Calpine Geysers (Green Loan Coordinator); NRG (Sole Sustainability Structurer and Coordinator) and Kincarde.
1.NRG $900m Sustainability-Linked Bond
Natixis CIB was appointed as Sole Sustainability Structurer and Coordinator in NRG’s inaugural Sustainability-Linked Bond (“SLB”) issuance which closed in Nov-2020.
This transaction represented a great milestone for the company and for the sustainability themed financing market, as it represented many firsts including:
- 1st SLB from a North American issuer;
- 1st SLB from a power company outside of Europe; and
- 1st SLB with a “most ambitious target” clause ensuring that any future SLBs from NRG will be of equal or greater climate ambition.
- The Sustainability-Linked format was applied to the $900mm Senior Secured Notes, with an absolute GHG emissions reduction target to be tested for the 2025 fiscal year and will result in a 25bps coupon step-up should NRG fail to satisfy this target.
Books peaked at c.$3.9bn, closed at $3.6bn and saw compression of 27.5bps implying zero new issue concession.
The framework was prepared in accordance with the Sustainability-Linked Bond Principles 2020 as published by the International Capital Market Association (e.g. selection/calibration of KPIs and reporting/verification).
Natixis CIB acted as Green Loan Coordinator (along with CA-CIB) for the $1.1 billion Climate Bonds Initiative Certified financing of the Geysers which closed in June 2020.
The Geysers are a portfolio of 13 geothermal power plants, the largest complex in the U.S. providing ~10% of the annual renewable power in California with proven operating track record, long residual life and low marginal cost of production.
DNV GL, a Climate Bonds Initiative (CBI) Approved Verifier, has performed the pre-issuance verification of the Green Loan.
The financing consists of a $900 million senior secured term loan (“Green Loan”) and a $200 million letter of credit facility.
Natixis CIB acted as sole green loan coordinator for the £380m financing of the Kincardine Offshore Windfarm Limited which closed on June 12th, 2020. The project comprises the construction of a 50MW floating offshore wind farm, located south-east of Aberdeen, Scotland, which will be the largest floating offshore windfarm in the world when completed.
Through the certification process conducted by Natixis, the financing of the project was awarded the “Certified Climate Bond” label by Climate Bonds Initiative (“CBI”).
Vigeo Eiris has been mandated as verifier of the Marine Renewable Energy Criteria ensuring that the certified loan is consistent with the 2°C warming limit in the Paris Agreement.
Example of platform creation allowing broader access to sustainable projects + Portfolio changes: e.g. exiting strategy, active ESG risk mitigation:
Green Weighting Factor:
Natixis’ Green Weighting Factor is a mechanism that allocates capital to financing deals based on their climate impact. It applies to Natixis’ financing across all business sectors worldwide with the exception of the financial sector.
Financings are assigned an environmental rating on a seven-level color scale ranging from dark brown to dark green and receives a positive/negative adjustment in order to align our portfolio with a +2.5°C trajectory by 2024 and +1.5°C by 2050, consistent with the objectives of the Paris Agreement and achieve the United Nation’s Sustainable Development Goals related to climate change and the environment.
More information available https://www.youtube.com/watch?v=wFesQj43Nc4