Iberdrola raises $750m in green bond to drive Australia renewables and green hydrogen

Spanish energy giant Iberdrola has raised $A750 million (€460 million) through the issue of two green “kangaroo” bonds to help underwrite the expansion of its renewables portfolio in Australia, including into offshore wind, battery storage and green hydrogen projects.

The company says the two tranches of green debt – $A350 million (€215m) for a six-year term and $A400 million (€245m) for a 10-year term – attracted the interest of more than 80 investors and were oversubscribed by around 2.8 times, with demand reaching $A2.1 billion in aggregate.

The banks involved in the placement were Deutsche Bank, Mizuho, ANZ, Sumitomo and Bank of Tokyo-Mitsubishi.

“Thanks to strong interest from investors, who once again support the strategy of Europe’s largest electricity company by market capitalisation, the weighted average cost of the operation was set at less than 5.65%, for an average life of more than seven years,” Inberdrola said on Tuesday.

“This issue attracted the interest of more than 80 investors with a long-term vision, including Asian investors in addition to Australians. Those committed to the ESG had a relevant presence, thanks to the green nature of the operation, which will finance future investments in the renewable business in the country.”

Iberdrola, which has global assets of more than $230 billion, gained its first major foothold in Australia in 2020 through the takeover of the ASX-listed wind developer Infigen Energy.

In 2022, several months after the election of the federal Labor Albanese government, Iberdrola chair Ignacio Galán announced plans to invest between €2 and €3 billion into Australia’s clean energy transition.

Galán said then that his company intended to lift its renewable portfolio in Australia to 4GW in the coming years, with a particular interest in green hydrogen.

Since then, Iberdrola has backed a $1.2 billion proposal to build a renewable hydrogen and green fuels production plant in Tasmania in partnership with start-up Abel Energy and is developing the up to 3GW Aurora Green offshore wind farm off the coast of Gippsland in Victoria, for which it was granted a feasibility licence in March.