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A green bond for real

Negli ultimi tempi si sente sempre più parlare di un tipo particolare di prestito obbligazionario green, il cosiddetto green bond. Ma cosa significa? Perché e come Terna si è attivata per proporlo?

A green bond is a bond issued to fund projects which make a positive and substantial contribution to the environment and the battle against climate change, such as the implementation of works for energy efficiency, the creation of renewable energy production sources and the recycling of waste.

This kind of bond has recently started to catch on, as investors place more emphasis on environmental matters, which are now at the centre of public debate. The Climate Bonds Initiative reports issues for a total of 167.3 billion dollars for 2018. According to Forbes, this growth is somewhat due to greater awareness in investments. Several scientific studies have demonstrated that shares of more sustainable companies tend to perform better on the stock market than those from less sustainable ones.

The capital raised through a green bond is used to finance initiatives to reduce pollution and CO2 emissions (Pexels.com/Alex Koval)

Hence, it is now possible to invest in financial instruments which support the ecosystem, but also provide returns on invested capital. Bearing in mind the energy transition objectives set by the 2019-2023 Strategic Plan, Terna has decided to continue on its path towards green finance in line with what has been done so far in recent months. A new bond issued on the market has in fact had a positive reception across the board, exceeding the initial offer by approximately seven times, with a final value of € 500 million.

The proceeds will be used to finance initiatives to increase production from renewable sources, such as new power plant connections from these sources; infrastructure that facilitates increased efficiency in electricity transmission, reducing grid losses and CO2 emissions; solutions for reducing land use or protecting biodiversity.

The bond’s success confirms the choices made by the operator of the electricity transmission grid for the benefit of sustainability and growth. Terna has published a Green Bond Framework in order to facilitate communication on the green bonds issued, while also aiming for transparency and quality.