Global energy heavyweight, Iberdrola, announced securing a record-breaking $6 billion (€5.3 billion) credit line, with conditions pegged to the company’s environmental and social objectives, as originally reported on ESG Today.
The precedent-setting sustainability-linked facility, which involves 33 international lenders, introduces a unique feature wherein the credit rates will be reviewed annually and adjusted according to Iberdrola’s fulfillment of two specific sustainability goals. These include reductions in emission levels across all stages of their business operations, alongside a mandate to increase the representation of women in significant leadership positions within the company.
As part of Iberdrola’s strategic sustainability initiative, the company has pledged to attain carbon neutrality in their power generation plants by 2030 and aims to reach net zero throughout the entirety of its operations by 2040. It also plans to raise the proportion of women in key positions to 35% by the year 2030.
This novel financing method reflects the company’s earlier 2021 announcement, where it outlined its intent to incorporate a higher percentage of green and sustainable products in its financing structure, accounting for nearly two-thirds of its debt by 2025. Current figures show that almost $22 billion (€20 billion) of Iberdrola’s outstanding green bonds, equating to over 96% of its $22 billion credit line portfolio, are now sustainability-tied.
Furthermore, Iberdrola’s “ESG + F” initiative, which incorporates sustainability into its financial strategies, bolsters its $53 billion (€47 billion) investment plan, initiated to accelerate the transition away from fossil fuels and towards decarbonization. Unveiled in November 2022, the 2023 – 2025 investment plan earmarks $19 billion (€17 billion) for renewable energy and $30 billion (€27 billion) for electricity networks with a target to increase renewable capacity to 52,000 MW by the end of 2025.
The company has announced that it anticipates to update its investment plan in March 2024.
The Executive Chairman of Iberdrola, Ignacio Galán, stated:
“This credit line is yet another example of the financial community’s strong confidence in our strategy, based on value creation through investment in the energy transition and financial discipline. The transaction also enhances our commitment to our ESG goals.”
