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Constellation Energy Issues First Nuclear-Focused Green Bond in U.S. – ESG Today

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Energy Transition/ Sustainable Finance

Constellation Energy Issues First Nuclear-Focused Green Bond in U.S.

Susan Lahey

March 19, 2024

Energy provider Constellation Energy announced today that it has raised $900 million through a green bond offering, the first of its kind in the U.S. that can be used to finance nuclear energy projects.

The company said that it will use proceeds from issuance for investments in its nuclear power generation that reduce or avoid carbon emissions or provide other environmental benefits, such as maintenance, expansion and life extensions of its nuclear power generation. Constellation is the U.S.’ largest nuclear power operator.

The offering follows the release last month by Constellation of a new green financing framework, outlining eligible use of proceeds from green bond issuances, which included nuclear power within the “Clean Generation Fleet” category, alongside renewable energy and operational emissions reductions in its natural gas generation assets, with other categories including Clean Hydrogen, Energy Storage, and Clean Commercial Offerings, supporting programs to bring off-site renewable energy to the company’s customers.

The inclusion of nuclear power in the eligible use of proceeds for green bonds is a still rare, but increasing phenomenon. Notably, the government of Canada recently issued its second green bond, after updating its own green financing framework to add some nuclear energy expenditures in the list of eligible investment areas, making the country the first to do so. The inclusion of nuclear activities has been included in the sustainable finance taxonomies in jurisdictions such as the EU, although it proved controversial, with some member states, and the European Commission’s own sustainable finance advisory group opposed to its inclusion, noting problems including potentially adversely affecting other sustainability objectives and potential long-term problems from managing nuclear waste.

Dan Eggers, Executive Vice President and CFO, Constellation said:

“Elected officials on both sides of the aisle, climate and sustainability advocates and the general public are increasingly recognizing the value nuclear energy delivers, not only for its unmatched 24/7 reliability, but for its positive environmental impact as a clean energy resource. The strong market response shows the investment community agrees nuclear energy is a unique clean-energy technology that is going to play a critical role for decades to come and is a safe, long-term investment.”

Crédit Agricole CIB served as green structuring agent in the nuclear green bond offering.

Romina Reversi, Head of Sustainable Investment Banking for the Americas at Crédit Agricole CIB said:

“Our bank is pleased to have supported Constellation on the first-ever U.S. corporate green bond with proceeds allocated towards nuclear energy. This groundbreaking transaction is a testament to Constellation’s ambitious sustainability efforts, and such leadership in the sustainable finance capital markets will undoubtedly serve as an inspiration for future global nuclear focused green bond issuances.”

Susan Lahey

Susan Lahey started her career as a business reporter for The Kansas City Star and has worked as a freelancer covering business, investment, technology, sustainability and science for numerous publications. She has also worked as a writer and editor for publicly funded projects mandating environmental cleanup of a molybdenum mine in Northern New Mexico; and recovery and resiliency measures following Hurricane Maria in Puerto Rico. Recently she worked as Director of Communications for a European wave energy company.

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