SSE issues biggest ever UK green bond, worth €600mn
British energy firm SSE has reaffirmed its commitment to tackling climate change by issuing the biggest ever green bond by a UK company, which is worth €600mn.
The bond is the first of its kind issued by a UK headquartered energy company and supports not only the development of an active UK market in environmentally-friendly capital market products but, perhaps most importantly shows a strong commitment towards the environment and future generations.
This eight-year, 0.875% green bond provides capital that SSE will use to refinance SSE’s portfolio of recently constructed or under construction onshore wind farms.
There was significant demand for this green bond, which allowed SSE to price at the tighter end of guidance achieving its lowest ever coupon for a senior bond.
SSE said the meaningful participation of socially responsible investors has demonstrated there is material appetite for financial products aligned with the mitigation of environmental concerns.
Gregor Alexander, Finance Director of SSE, said: “In line with our innovative approach to financing investment and as major investor in the UK and Ireland’s renewable energy infrastructure, we are pleased this new issuance shows our commitment to SSE’s sustainability and responsibility principles.
“At the same time we are being consistent with our commitment to maintaining a strong balance sheet and strong market rating, allowing this funding to be secured at very attractive pricing.”
In a statement, SSE added: “Investors are not only motivated by pure environmental considerations; they are also making pragmatic decisions about where they put their money.
“Climate change presents a material long-term risk to certain investments. Investing in a green bond that finances assets to mitigate climate change helps to manage that risk over the long term.
“From SSE’s perspective, this green bond sends out a clear and unequivocal message: SSE supports the transition to a low carbon energy system and wants to see a sustainable economy in the UK and Ireland in the long term.”
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.