Iberdrola, a global energy and electricity provider, has announced the successful raising of €1 billion (£865 million) through the first-ever issuance of a hybrid green bond under the new European Green Bond (EuGB) standard. The offering attracted significant interest, with the order book surpassing €8 billion from over 400 investors across Europe, the UK, Asia, and North America. This strong demand allowed Iberdrola to issue more than initially planned and secure a coupon of 3.75%, the lowest for hybrid bonds issued this year.
The EuGB regulation, introduced by the [European Commission](https://www.esgtoday.com/european-commission-launches-new-sustainable-finance-strategy/), aims to establish a “gold standard” for green bonds to combat greenwashing and promote sustainable finance within the EU. Effective from December 2024, the regulation mandates that proceeds from EuGB-designated instruments are invested in economic activities aligned with the EU Taxonomy. It allows a 15% flexibility for investments in activities that meet taxonomy requirements but lack established criteria, provided issuers clearly explain fund allocation.
Bonds issued under the EuGB designation must adhere to strict transparency criteria, including disclosing the use of proceeds, committing to a green transition plan, and reporting on investment contributions to those plans.
Iberdrola is a leading corporate issuer of green bonds, using them to fund renewable energy, energy efficiency, clean transportation, and waste management projects. The company announced in 2021 its intention to increase the proportion of green and sustainable products in its financing structure, aiming for these to represent nearly two-thirds of its debt by 2025. In 2024, 94% of Iberdrola’s financing was sustainable, with its sustainable financing exceeding €60 billion by the end of the year.
In a statement regarding the offering, Iberdrola commented: “The volume of demand and the conditions set once again demonstrate the level of confidence of the market and investors in the soundness and solvency of the Group’s business and growth plans.”
