VERBUND AG: Austria’s leading company in the energy transition creates a novelty in the bond market and issues the first EU taxonomy aligned “Green and Sustainability-linked Bond”

This communication constitutes neither an offer of securities for sale nor a solicitation of an offer to purchase securities. The final prospectus containing the terms and conditions relating to the notes, when published, will be available on the website of the Luxembourg Stock Exchange (https://www.bourse.lu/). This communication is an advertisement for the purposes of Regulation (EU) 2017/1129 and underlying legislation. It is not a prospectus.

Austria’s leading utility and international green finance pioneer VERBUND is planning to add another chapter to its successful sustainability story. The company intends to place a senior unsecured bond featuring a variety of sustainable characteristics.

The bond represents an innovation on the sustainable capital market, as it combines a clearly defined environmentally sustainable (“green”) use of proceeds with a coupon step-up that is linked to company-wide sustainability targets (“sustainability-linked”). VERBUND intends to use the proceeds from the bond issue for the renewal and expansion of an existing hydropower plant, as well as for the expansion of its power grid in Austria. The Green Financing Framework of VERBUND, which has been developed in alignment with the Green Bond Principles 2018 and the Sustainability-Linked Bond Principles 2020, is in line with the most recent draft of the Delegated Acts of the EU Taxonomy Regulation, which was published in November 2020 and is the first classification system for green activities at European level. The coupon of the bond increases if the company fails to meet two predefined sustainability targets. These targets require, inter alia, a minimum of newly installed production capacity of renewable energy sources (water, wind, photovoltaics) of at least 2,000 MW, as well as a minimum of additional transformer capacities of at least 12,000 MVA in order to be able to feed in the renewable electricity into the high-voltage grid. Further details can be found in VERBUND’s recently published “Green Financing Framework” as well as in the second party opinion conducted by ISS ESG.

With its independent second party opinion, the internationally recognized sustainability rating agency ISS ESG confirmed the compliance of all projects with common practices, principles and standards in the bond market, as well as compliance with the environmentally sustainable criteria and thresholds defined in the EU taxonomy.

Peter F. Kollmann, CFO, VERBUND AG: “With the envisaged VERBUND Green & Sustainability-Linked Bond, we continue to contribute to a green energy future with another innovative financing tool issued by VERBUND. After the first Green Bond issued by a company in German-speaking countries in 2014, the world’s first Green and Digital Promissory Note as well as the first 100% ESG-linked Syndicated Loan in 2018, VERBUND is setting another milestone in the field of green finance with this financial instrument based on sustainability criteria.”

Link to the corporate profile of VERBUND: here

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