UK utility SSE has cemented its position as the largest UK issuer of green bonds, with its second issue, a 650 million euro (US$839 million) nine-year bond.
The money will be used to invest in new renewable energy projects.
Gregor Alexander, finance director at SSE, said: “In line with our innovative approach to financing investment and as a major investor in the UK and Ireland’s renewable energy infrastructure, we are pleased that this second green bond continues to show SSE’s focus on sustainability and responsibility principles.”
It follows a 600 million euro (US$772 million) offer last year that was the biggest single UK green bond at the time and the first of its kind by a UK energy group.
That issue was popular with investors and helped the company to refinance its onshore wind farm portfolio.
“Today's issuance affirms SSE as the largest issuer of green bonds from the UK corporate sector and is additionally the only UK corporate to offer up multiple benchmark sized tranches in the Euro market,” the company said.
SSE’s return to the markets follows its application to build a new transmission cable between northern Scotland and the Western Isles to allow wind farms to be built on the islands and export power back to the mainland grid system.
Wind farms on Scottish islands are set to be allowed to compete for renewable power contracts in future, alongside offshore wind facilities.
A new report says that green bond issuance is likely to reach a new record of US$185 billion this year, with strong demand and a number of deals in the pipeline.
The report, from Sweden’s SEB, says that some US$97 billion of green bonds have been issued so far this year in 16 different currencies, up 19% on the same period the year before, bringing the total amount of the asset class issued to just under US$500 billion.
Corporate issuers such as SSE have been particularly busy, with the sector growing 40% from 2017 to US$44 billion.
“Positive augurs are plentiful for the rest of the year, with the market continuing its fruitful quest of sectoral maturation and diversification; with over two dozen repeat issuers coming to market in 1H18; some large economies featuring heightened activity [eg the
US corporate market, Spain, Germany, Japan, and Indonesia] alongside new sectors [eg shipping and pension funds],” SEB added.