TrønderEnergi Enters Green Bond Market

    Stockholm (NordSIP) – The energy transition is not paved merely by renewable energy, but also by increased efficiency in energy use. This is not a new journey. Since the early 2000s, Nordic energy consumption has been on a lightly downwards path. However, net-zero emission ambitions require a steeper adjustment.

    One company whose recent expansions point in a similar direction, Norway’s TrønderEnergi, recently issued its inaugural green bond at the end of February in a dual-tranche transaction worth NOK1.5 billion.

    Strong Demand

    The total amount was divided into two tranches. TrønderEnergi issued a seven-year fixed-rate green bond worth NOK850 million that pays a 2.07% coupon and was priced at MS+63 basis points (bps), down from initial price thoughts (IPTs) of 65bps. The Norwegian issuer borrowed the remaining NOK650 million through a 4.5-year floating rate tranche that pays a coupon of 50bps over the 3-month NIBOR rate, down from IPTs of 3mN+55bps Strong investor demand pushed bids to a peak of NOK 2.2 billion before a final order book of NOK1.8billion, once the final pricing details had been reached.

    Demand came entirely from Norway for both tranches. Sectorally, asset managers represented 46% and 91% of the demand for the fixed-rate and for the floating rate notes, respectively. Pension funds purchased 56% of the fixed-rate tranche and 8% of the floating rate note, leaving another 1% of the latter tranche to other undisclosed investors.

    According to TrønderEnergi, the strong demand could be explained by the top “dark green” rating that Cicero Shades of Green assigned to TrønderEnergi Group’s Green Bond Framework in its second opinion.

    A Holistic Approach

    TrønderEnergi’s CIO Olav Sem Austmo (Pictured), highlighted the need for a holistic approach to sustainability beyond renewable energy sources. He noted that CICERO’s rating and the investors’ interest were a recognition of the company’s efforts.

    TrønderEnergi Group has interests across the various branches of Norway’s energy sector. It operates 18 hydropower plants and 14 wind farms. Beyond producing and selling renewable energy from hydropower and wind power, TrønderEnergi Group has been expanding into electrification and customer services.

    OhmiaCharging, a wholly-owned subsidiary of TrønderEnergi Group, is one of the key Norwegian players in electric car charging for housing associations and co-owners. Following the acquisition of several companies that provide energy services to the grocery trade, TrønderEnergi Group also established Ohmia Retail in the autumn of 2020, which already services over 2,200 Norwegian grocery stores.

    TrønderEnergi also owns a 40% ownership in Tensio (one of Norway’s largest grid companies) and the largest share of Scandinavian Biogas, a Nordic biogas group which, among other things, owns the Biokraft plant in Skogn.

    Image courtesy of TrønderEnergi

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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