BBVA and Enel sign €1.35 billion sustainable guarantee facility
BBVA and Enel have signed a €1.35 billion sustainable linked guarantee facility. This guarantee facility, the largest of its kind signed by Enel Group, is an essential and necessary financial tool for the company’s entire operations: production, transport and distribution of electricity and gas, and public lighting services.
In line with its commitment to sustainability, Enel signed €1.35 billion with BBVA sustainable linked guarantee facility, the largest by value signed by the group to date, contributing to UN Sustainable Development Goal 7: affordable and clean energy.
The economic conditions of this guarantee facility are linked to a sustainable indicator, specifically Enel group's share of renewable productive capacity. Thus, the guarantees issued by BBVA in the interest of Enel and its subsidiaries will include the promotion of sustainability-related initiatives and actions.
In proof of Enel's firm commitment to the achievement of the United Nations’ SDGs, this indicator will be taken into account not only for 2021 but also for 2022. If Enel reaches a level of achievement of 55 percent of the indicator or more in fiscal year 2021, and 60 percent or more in 2022, the bank will reward Enel with a bonus; otherwise, the utility has agreed to pay the bank a penalty.
This landmark transaction is aligned with the sustainable financing strategy that Enel has been implementing for the past two years. The electric utility is a pioneer in the formalization sustainability-linked bond and financing transactions in Europe and the United States, and is also the first company to sign a sustainability-linked currency derivatives agreement.
BBVA, a leader in sustainable finance
As a sign of its firm commitment to the fight against climate change, in 2018 BBVA approved its Pledge 2025, pursuant to which it has already mobilized €50 billion of the €100 billion target set through 2025 in green financing, sustainable infrastructure, social entrepreneurship and financial inclusion. The bank has the capacity, knowledge and experience to provide its clients superior advisory services for sustainable financial solutions and is playing a key role in developing this market
In 2018 the bank took a further step in its goal to support its corporate clients in their sustainable financing strategies with the creation of an innovative sustainable transaction product framework, the first of its kind in the industry. This methodology allows the bank to classify its clients’ transactional banking operations as green, social, or sustainable.
Also, in late 2019, the bank launched a new range of products (confirming and deposit facilities) under this framework, which include a new angle to certify products as sustainability-linked. In 2020, BBVA signed 41 sustainable transactional banking transactions for a total of €1,574 million.