Reykjavík Energy (Orkuveita Reykjavíkur; RE) has issued a new framework for financing the group's green investments. In an independent evaluation by the rating agency S&P Global, the framework has been awarded a "dark green” rating. S&P further states that all activities planned to be funded under the framework align with the stringent sustainability requirements of the European Union's Taxonomy Regulation. All core operations within the RE Group are considered eligible under the regulation, except the telecommunications operations of Reykjavík Fibre Network.
The financing framework and S&P Global's assessment of it are attached.
"This excellent rating is significant for us,” says RE's CEO Sævar Freyr Þráinsson. "Reykjavík Energy remains committed to leading society's green transition. This commitment is clearly reflected in the group's newly published financial forecast. According to the forecast, the group aims to maintain previous energy transitions through the continued development of robust utility systems, as well as new energy sourcing and large-scale carbon sequestration. All of this requires funding, and we must secure it on the most favourable terms possible . The outstanding rating the framework has received is very important in this regard and serves as a testament to Orkuveitan's well-organised sustainability efforts,” adds Sævar Freyr.
Reykjavík Energy was the first Icelandic company to issue green bonds domestically in 2019, and it must renew the financing framework for sustainable bond issuance every five years. RE's management believes that the issuance of green bonds offered on the Nasdaq Sustainable Bond market has both increased investor demand for the bonds and led to more favourable borrowing terms. The funding framework also covers other financing for Orkuveitan's group, such as bank loans. Currently, about 52% of the group's financing falls under the framework.
While Reykjavík Energy's green financing has grown in recent years, there has also been a reduction in loans guaranteed by the company's owners. In year 2010, RE's owners - the City of Reykjavík, the Township of Akranes, and the Municipality of Borgarbyggð - guaranteed 93% of the group's loans. That percentage now stands at 24%.
Contact:
Snorri Hafsteinn Þorkelsson
Chief Financial Officer
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