BNP Paribas will execute a green repo with EDF, a first for a corporate
The proceeds of this innovative financing structure, on which BNP Paribas was sole arranger and counterparty, will be used to finance or refinance a project adhering to green financing principles, guidelines and standards as set forth in EDF’s 2020 Green Bond Framework.
A leading Green Bond issuer since 2013, EDF is among the first utility companies to have set a target to achieve net-zero by 2050. BNP Paribas is the world’s leading bank in the sustainable financing sphere with a strategic commitment to accompany customers in their energy transition. The two groups have worked jointly to structure and execute the first green repurchase agreement by a corporate issuer.
Entrenching ESG principles into every aspect of their treasury management is a key focus for EDF. This green repo instrument enables EDF to draw financing from BNP Paribas against individual green assets as they are originated, complementing their green bond programme that requires a larger pool of pre-originated assets.
Under the green repo program EDF will apply a use of proceeds approach identical to that set forth in its Green Framework to finance green assets. The first project to be financed is “Big Beau Solar” an innovative project combining 165 MW of solar generation and 40 MW of battery storage project developed by EDF Renewables in California. EDF will collateralise the repo with its liquid bond holdings to reduce the financing cost of the project.
Sam Crawford, Head of Secured Funding Structuring EMEA, BNP Paribas said: “BNP Paribas is proud to have acted as sole arranger and counterparty for EDF, a long-standing partner, in the structuring of this pioneering sustainable finance product. By taking a green repo to the corporate world, we believe that a new market standard for ESG secured financing and investment is on the rise. We are closely working together with our peers and industry groups to develop a framework for the repo market to assist more issuers, both institutional and corporate to access these new instruments”.
Bernard Descreux, Group Treasurer EDF SA said: “The green repo technology is a complementary innovation to our existing green financing tools. The repo facility provides access to an efficient cost of financing as we originate and ramp up green assets ahead of future Green Bond issuances.”
NOTES TO EDITORS
About Green Repos – A green Repo is a complementary green refinancing tool to a green bond, allowing an issuer to immediately refinance green assets / projects and finance them on a short-term to medium-term between two green bond issuances.
About BNP Paribas track record in green repos: BNP Paribas has now closed a green repo transaction in Asia, America and Europe, and is actively contributing to establishing a new green repo market standard. The bank is not only a key repo market player but is also building and leading the sustainability path of this market.
BNP Paribas is the European Union’s leading bank and key player in international banking. It operates in 68 countries and has more than 193,000 employees, including nearly 148,000 in Europe. The Group has key positions in its three main fields of activity: Retail Banking for the Group’s retail-banking networks and several specialised businesses including BNP Paribas Personal Finance and Arval ; Investment & Protection Services for savings, investment and protection solutions ; and Corporate & Institutional Banking, focused on corporate and institutional clients. Based on its strong diversified and integrated model, the Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, BNP Paribas has four domestic markets: Belgium, France, Italy and Luxembourg. The Group is rolling out its integrated retail-banking model across several Mediterranean countries, Turkey, Eastern Europe as well as via a large network in the western part of the United States. As a key player in international banking, the Group has leading platforms and business lines in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
BNP Paribas has implemented a Corporate Social Responsibility approach in all its activities, enabling it to contribute to the construction of a sustainable future, while ensuring the Group's performance and stability.
As a major player in energy transition, the EDF Group is an integrated energy company active in all businesses: generation, transmission, distribution, energy trading, energy sales and energy services. EDF group is a world leader in low-carbon energy, having developed a diverse production mix based mainly on nuclear and renewable energy (including hydropower). It is also investing in new technologies to support energy transition. EDF’s raison d’être is to build a net zero energy future with electricity and innovative solutions and services, to help save the planet and drive well-being and economic development. The Group is involved in supplying energy and services to approximately 37.9 million customers (1), of whom 28.7 million in France (2). It generated consolidated sales of €69.0 billion in 2020. EDF is listed on the Paris Stock Exchange.
- Since 2018, customers are counted per delivery site. A customer can have two delivery points: one for electricity and another one for gas.
- Including ÉS (Électricité de Strasbourg).