Green Bonds

Green Bonds are conventional debt instruments: they are bearer securities, generally listed on a regulated market and with the same level of recourse as the borrower's other senior creditors.  Their special feature relates to the use of the funds raised; the proceeds of these loans are intended to be invested exclusively in so-called "green" projects, generating climate and/or other environmental benefits and also meeting social and societal criteria. ENGIE issued its first green bonds for an amount of €2.5 billion in April 2014, to support its development plan in renewable energies and energy efficiency. At the end of March 2020, ENGIE's total Green Bonds issuance reached €11.15 billion, making the Group one of the leading corporate issuers on the Green Bonds market.

The evolution of green bonds in relation to the Group's total issuances is presented below.

Information on the Group's various emissions is available in the Green Finance section.

Since 2017, the Group's Green Bonds comply with the provisions of a general reference framework (Green Bond Framework) that ENGIE has defined for all its green emissions to be made from the date of publication of this Framework. This general framework stipulates, among other things, that for each green bond issue, the funds raised are intended to finance the Group's investments in so-called "eligible" projects, i.e. those that meet the environmental, social and societal criteria listed in this framework and defined in collaboration with the extra-financial rating agency Vigéo Eiris. 

The eligibility criteria have recently been reviewed and published in a new expanded framework ("Green Financing framework") which will apply from March 2020 to the Group's green financing.

Information on the Group's various emissions and their associated framework is available in the Green Finance section

The framework-eligible categories are likely to contribute to five of the United Nations Sustainable Development Goals ("SDGs"), namely: Goal 7. Affordable and clean energy, Goal 9. Industry, Innovation and Infrastructure, Goal 11. Sustainable Cities and Communities, Goal 13. Climate Action, Goal 15. Life on earth

A Green Bond Committee (recently renamed "Green Financing Committee" or Green Finance Committee, aiming to encompass all green finance subjects in general) meets regularly to discuss market developments and projects likely to be financed by the Green Bond - the so called Eligible Projects. It is chaired by the CSR Department and coordinated jointly with the Finance Department. It includes representatives from the Purchasing Department, the Global Care Department, the Ethics & Compliance Department and the main BUs concerned.

Calculation of the contribution of Eligible Projects to avoided or reduced CO₂ emissions

ENGIE uses two concepts: (i) the concept of avoided emissions which concern projects of new installations improving, in relative terms, the carbon footprint of a given country and, (ii) the concept of reduced emissions which concern projects of improvement of existing installations which therefore improve the country's carbon footprint in absolute terms.

For power generation projects, the reference methodology for calculating the contribution to avoided emissions is based on a so-called "LCA" (Life Cycle Assessment) approach. This involves comparing the LCA emissions induced by the energy production technique implemented by the project and the average LCA emissions generated for the mix of the country under consideration. ENGIE evaluates the contribution to avoided emissions of the projects financed by the Green Bond by multiplying the difference of the two LCA values mentioned by the nominal capacity of the plant and the average rate of use of the technology. The avoided emissions are calculated for one year of operation of the projects, considered in the normal operating phase and taken at 100% regardless of the Group's ownership rate in these projects.

Project Contribution to Avoided Emissions =
[(LCA Emission Factor of the country mix) – (LCA Emission Factor of the country mix)] x GW installed x Hour of operation over a year

The references by country for the operating rates of the technologies making up the country mix, and the average CO₂/kWh emission rates of the energy mix, are taken from data available from Enerdata (Enderdata data). The LCA data for the technologies are taken from the work of the Intergovernmental Panel on Climate Change (IPCC data).

To calculate the contribution of energy efficiency projects (including green buildings) to reduced emissions, ENGIE evaluates them by multiplying the energy savings brought by the project by the emissions of the energy mix of the country where the project is developed. Reduced emissions are calculated for one year of operation of the projects, considered in the normal operating phase and taken at 100% regardless of the Group's ownership of these projects.

Project Contribution to Reduced Emissions = LCA Emission Factor d’Emissions ACV of the country mix x GWh of energy savings

For the calculation of the contribution to avoided emissions of projects relating to energy transmission, storage infrastructure or supporting clean mobility, ENGIE evaluates them on a case-by-case basis by estimating the projects' contributions to a greater use of renewable energy or non-carbon energy compared to the existing carbon scenario. Avoided emissions are calculated for one year of operation of the projects, considered in the normal operating phase and taken at 100% regardless of the Group's ownership of these projects.

The main Eligible Projects that were financed in 2019 with the proceeds of the January 2019 Green Bond issue are presented in the following table. 

Description of the projects

The main new projects concern the development of solar and wind farms in France and North America. The Group has also acquired Vol-V Biomass thus becoming the leading biomethane production in France with the aim of intensifying the development of this sector in France. The main project allocated in terms of energy efficiency is the acquisition of CertiNergy which reinforces the Group's position on energy saving certificates to accelerate the energy transition of companies and communities. In terms of mobility, the green bond of January 2019 has enabled ENGIE to finance various projects presented in the following link (Clean Mobility) and in particular the acquisition of Powerlines, which enables it to become a major player in the electrification of rail networks in Europe

Impact Reporting 

In the full operation phase, the projects are expected to contribute to avoid emissions of at least 3.43 million tons of CO₂eq per year: (i) for renewable projects, a minimum of 3.02 million tons of CO₂eq/year, (ii) for mobility projects, 0.04 million tons of CO₂eq/year, and (iii) for energy efficiency projects, a minimum of 0.37 million tons of CO2eq/year.

The breakdowns by technology and by region of the impacts in tons of CO₂ eq per year of the projects financed by the Green Bond of January 2019 are presented below (at 100%).

The contributions to reduced or avoided emissions are presented in the following table using different weighting methods: a) at 100% regardless of the Group’s ownership rate and regardless of the nature of the capex (financial or development), b) according to the Group's ownership rate and regardless of the nature of the capex (financial or development), c) considering only the development capex regardless of the Group’s ownership rate (at 100%), and finally d) according to the Group's ownership rate and taking only the development capex.

ENGIE favors the first method because of its major industrial role in the development of these projects, which leads it not to modify its impact reporting in the event of a sale. However, the contribution according to the three alternative methods is presented at the request of certain investors. 

The main Eligible Projects which were financed in 2019 by the product of the Green Bond issue of January 2018 are presented in the following table.

Supplemented by a part allocated in 2018

Description of projects

The main new projects concern the development of solar and wind farms on all the continents where the Group is present. In addition to the countries where the Group has a platform for the development of renewables (France, Belgium, USA, Mexico) ENGIE inaugurated in 2019 the largest wind farm in Egypt, has also strengthened its presence in Spain and announced the commissioning of the Kathu thermodynamic solar power plant, one of the largest renewable energy projects in South Africa. Financing also contributed to the financing of the first floating wind farm in continental Europe and the acquisition of Mobisol which enables Engie to become the leader in the off-grid solar market. 

Impact reporting

When fully operational, renewable projects should contribute to avoid emitting greenhouse gases of at least 3.30 million tons of CO₂eq / year, while energy efficiency projects should contribute to reduce greenhouse gas emissions of at least 0.09 million tons of CO₂eq / year, or a total of 3.39 million tons of CO₂eq per year.

The breakdowns by technology and by region of impacts in tons of CO₂ eq / year of the projects funded by the Green Bond of January 2018 are presented below.

The contributions to reduced or avoided emissions are presented in the following table using different weighting methods: a) at 100% regardless of the Group’s ownership rate and regardless of the nature of the capex (financial or development), b) according to the Group's ownership rate and regardless of the nature of the capex (financial or development), c) considering only the development capex regardless of the Group’s ownership rate (at 100%), and finally d) according to the Group's ownership rate and taking only the development capex.

ENGIE favors the first method because of its major industrial role in the development of these projects, which leads it not to modify its impact reporting in the event of a sale. However, the contribution according to the three alternative methods is presented at the request of certain investors.

The total funds allocated to Eligible Projects in 2018 amount to 170 million euros for the year 2017 and 1204 million euros for the year 2018 respectively. These amounts have made it possible to allocate 1250 million euros, i.e. the totality of the Green Bond issued in September 2017. The latter contributed to the financing or acquisition of Eligible Projects in the fields of renewable energy and energy efficiency.

The main projects are presented in the table below, which shows the country in which each project is located, the associated technology and the capex allocated for each project.

Description of projects

Description of projects:

Solar and wind energy in US

ENGIE considerably expanded its wind development portfolio in the U.S by acquiring Infinity Renewables, a leading developer of utility-scale wind projects in the United States. The acquisition includes more than 8,000 MW of projects in various stages of development. In end of 2018 ENGIE announced the start of construction of the 276 MW Solomon Forks Wind Project and the 196 MW East Fork Wind Project in northwest Kansas.

Solar and wind energy projects in Europe

ENGIE confirmed in 2018 its number one position in the solar and wind energy sectors in France with the acquisition of the LANGA group. Founded in 2008, the LANGA group, based in Brittany, is one of the most active independent producers of renewable energy, simultaneously present in solar, wind, biogas and biomass. The group is developing 1.3 GW of projects due to be completed by 2022. 

Solar and wind energy projects in Africa

ENGIE announced on 30 January 2019 the commercial operation of the 100 MW Kathu Solar Park in South Africa. This state of the art plant is a greenfield Concentrated Solar Power (CSP) project with parabolic trough technology and equipped with a molten salt storage system that allows for 4.5 hours of thermal energy storage to provide reliable electricity in the absence of solar radiation and during peak demand. Kathu is the first CSP development for ENGIE.

Transmission project in Latin America

Transmisora Eléctrica del Norte (TEN), a subsidiary of ENGIE (50%) and Red Eléctrica Internacional (50%) put into service the first electricity interconnection between Mejillones (Antofagasta Region) and Cardones (Atacama Region) of 500 kilovolts of voltage and 600 kilometers in length. The interconnection between the SING (Norte Grande Interconnected System) and the SIC (Central Interconnected System) networks will create a single, more robust, competitive system which will facilitate the entry of renewable projects. 

Energy efficiency

ENGIE aimed at being at the forefront of the energy transition with the acquisition in 2018 a majority stake of Electro Power Systems (EPS), a pioneer in hybrid solution storages. EPS is a company specialised in energy storage solutions and microgrids that enable intermittent renewable sources to be transformed into a stable power source. With the transaction, both companies aim at further accelerating their vision to be at the forefront of the energy transition, with special focus on decentralised energy solutions.

Clean transportation

ENGIE acquired EV-Box a leading electric charging player. Thanks to this combination, ENGIE intends to be a major global player in this space facilitating the development of clean mobility for its customers, while providing the essential energy solutions to manage the energy needs of electric vehicle charging for customer sites and the electricity network.

Impact Reporting

In the full operating phase, renewable projects (at 100%) should contribute to avoid greenhouse gas emissions of at least 3.01 million tons of CO₂eq/year while energy efficiency projects (at 100%) should contribute to reduce greenhouse gas emissions of at least 0.15 million tons of CO₂eq/year, that is, a total of 3.16 million tons of CO2eq per year.

Technology and regional breakdowns of the impacts in tons of CO₂ eq of the projects financed by the Green Bond of September 2017 are set out below (at 100%).

The contributions to reduced or avoided emissions are presented in the following table using different weighting methods: a) at 100% regardless of the Group’s ownership rate and regardless of the nature of the capex (financial or development), b) according to the Group's ownership rate and regardless of the nature of the capex (financial or development), c) considering only the development capex regardless of the Group’s ownership rate (at 100%), and finally d) according to the Group's ownership rate and taking only the development capex.

ENGIE favors the first method because of its major industrial role in the development of these projects, which leads it not to modify its impact reporting in the event of a sale. However, the contribution according to the three alternative methods is presented at the request of certain investors.

The total funds allocated under this issue to Eligible Projects developed during the years 2016 and 2017 amount to 81 million euros and 1419 million euros respectively. These amounts make it possible to allocate €1,500 million, i.e. the totality of the Green Bond issued in March 2017. The March 2017 Green Bond contributed to the financing or acquisition of Eligible Projects in the fields of renewable energy and energy efficiency.

Description of projects 

Solar and wind projects in France

ENGIE, a major player in renewable energy production in France, is committed to the energy transition and the development of renewable projects The allocated capex related to the wind and solar projects of its solely owned subsidiary ENGIE Green, resulting from the merger of Futures Énergies and Maia Eolis in 2016 and LCV - La Compagnie du Vent - in 2017 and its subsidiary CNR (Compagnie Nationale du Rhône - 49.9%) through its subsidiary CN'Air (hydroelectricity, onshore wind and solar photovoltaic) for a total installed capacity of 142 MW and 36 MW respectively for wind and solar power. Also worth noting are the two offshore wind projects in Dieppe/Le Tréport, and l’Ile d’Yeu/Noirmoutier (2 x 500 MW in capacity, projects 47% owned by ENGIE). The 2016 financial capex relating to the buyout of minority interests in Solaire Direct has also been included.

Wind (Campo Largo) and solar (Floresta and Paracatu) projects in Brazil

ENGIE, which is the main private electricity producer in Brazil (about 6% of the country's installed capacity) is continuing its development through new renewable energy production projects. Thus renewable energy represents 90% of its installed capacity in Brazil. Capex projects currently under construction and financed by the Green Bond are the Campo Largo onshore wind farm (327 MW), and the Floresta (86 MW) and Paracatu (132 MW) solar farms.

Offshore project (UK)

In September 2011, the Group won a contract with the Portuguese company EDP Renováveis to develop a 950 MW offshore wind farm in the United Kingdom. ENGIE stake: 23%.

Onshore wind project in Australia

ENGIE began pre-construction work in 2017 on the 119 MW Willogoleche wind farm near Hallett in the Mid North region of South Australia. ENGIE's interest in this project is 72%.

Biomass Project

Two cogeneration projects to supply heating networks and operating in biomass co-combustion were integrated into the Green Bond of March 2017 (Mâcon in France - 100% ENGIE, and Sisslerfeld in Switzerland - 60% ENGIE) for an injected biomass estimated at 230 GWh.

Tabreed (United Arab Emirates)

In July 2017, ENGIE bought a 40 percent stake in Tabreed (National Central Cooling Company PJSC), which provides innovative cooling solutions for buildings and other infrastructure to the United Arab Emirates and the member countries of the Gulf Cooperation Council (GCC). The company delivers the equivalent of over 1 million tons of cooling to its clients across 71 district cooling plants located throughout the region, replacing individual refrigeration systems with 40% lower efficiency.

Ohio State University Project (USA)

In April 2017, ENGIE (50%) and Axium Infrastructure US (50%) won a 50-year concession to sustainably manage Ohio State University’s energy infrastructure. The contract pertains to the operation and optimization of the university’s energy production and distribution facilities, and energy efficiency services to reduce energy consumption by 25% within the first ten years of the contract.

Keepmoat (UK)

In March 2017, ENGIE acquired Keepmoat Regeneration, the UK’s leading provider of regeneration services, improving buildings, places and communities through refurbishment and upgrade. Keepmoat has extensive capabilities in creating zero carbon new homes, retrofitting high-rise residential accommodation and supporting the cost reduction and energy efficiency targets of community regeneration projects, such as insulation and heating solutions to on-site generation and energy consultation services. Energy savings were estimated using statistical data based on installed technology. Most of the savings were generated from heat insulation with an estimated efficiency of 20 percent.

Green Charge Project (USA)

In 2016, ENGIE acquired an 80 percent stake in California-based battery power storage company Green Charge Networks (Green Charge). It uses advanced patented software algorithms and analytics to optimize battery systems at commercial & industrial (C&I) and public sector customer sites in the United States. These systems generate financial and environmental benefits by storing energy from an efficient system (generally combined cycles) and avoiding non-efficient peak systems considered 40% less energy efficient.

Project Smart Grid (Gazpar - France)

Since January 2016, more than 160,000 smart meters have been installed in 24 pioneering municipalities. The general roll-out of these gas meters began in May 2017 and will gradually be extended to all French metropolitan regions, benefiting approximately 11 million customers. The smart gas meter allows customers to monitor their consumption to better control it. A technical and economic study carried out under the supervision of the French Energy Regulation Authority ("CRE") based on the GRDF scope, estimated the total possible gains in terms of energy savings following the installation of these smart meters at 1.5%.

Impact Reporting

For CDM (Clean Development Mechanism) projects registered and approved by the United Nations, the results of the calculations are based on the underlying methodologies

Reduced and avoided emissions of the March 2017 green bond

In the full operating phase, renewable projects (at 100%) should contribute to avoid greenhouse gas emissions of at least 2.2 million tons of CO₂eq/year while energy efficiency projects (at 100%) should contribute to reduce greenhouse gas emissions of at least 1.1 million tons of CO₂eq/year, that is, a total of 3.3 million tons of CO2eq per year.

Technology and regional breakdowns of the impacts in tons of CO₂ eq /year of the projects financed by the Green Bond of March 2017 are set out below (at 100%).

The contributions to reduced or avoided emissions are presented in the following table using different weighting methods: a) at 100% regardless of the Group’s ownership rate and regardless of the nature of the capex (financial or development), b) according to the Group's ownership rate and regardless of the nature of the capex (financial or development), c) considering only the development capex regardless of the Group’s ownership rate (at 100%), and finally d) according to the Group's ownership rate and taking only the development capex.

ENGIE favors the first method because of its major industrial role in the development of these projects, which leads it not to modify its impact reporting in the event of a sale. However, the contribution according to the three alternative methods is presented at the request of certain investors.