National Grid’s Viking Link Interconnector secures the first multi ECA green loan worth US$743m
National Grid announces the first ever multi export credit agency (ECA) covered green loan, guaranteed by SACE with SIMEST CIRR support and Euler Hermes.
The US$743 million ECA-backed financing package, made up of US$488 million from SACE Export Credit and US$255 million from Euler Hermes Export Credit, was structured under National Grid’s Green Financing Framework. This is the first time multiple ECAs have come together to finance a green project of this size.
The loan, which follows the guidelines set by the Loan Market Association’s Green Loan Principles, will help fund a €2 billion subsea electricity cable, known as an interconnector, between the UK and Denmark. Named Viking Link, the 1400 MW cable will supply renewable energy to 1.4 million households.
Viking Link, a joint venture between National Grid and Danish system operator Energinet, is a strategic infrastructure asset for the UK and Denmark. The project has been included on the European Union list of Projects of Common Interest (PCI) which demonstrates its fundamental role in supporting the EU transition to green energy in accordance with the Paris Agreement.
Once completed in 2023, the interconnector will enable more effective use of renewable energy, access to sustainable electricity generation and improved security of electricity supply, resulting in material environmental and socioeconomic benefits for both Denmark and the UK as well as the rest of Europe.
By 2030, 90% of electricity imported via National Grid’s interconnectors will be from zero carbon sources.
Katerina Tsirimpa, Head of Corporate Finance for National Grid said: “Britain’s energy system is in the midst of a rapid and complex transformation. We know we have a critical role in the acceleration towards a cleaner future. This green loan represents another important contribution towards our net zero commitment and it reinforces our strong leadership position in the path to a greener energy landscape.”
The facilities are structured by BNP Paribas’ Corporate & Institutional Bank (CIB) in its role as Structuring Bank, Bookrunner, Mandated Lead Arranger and Lender of both facilities, and Euler Hermes Agent, which was joined by HSBC Bank plc as Bookrunner, MLA, Lender and Agent of the SACE Export Credit and by Natwest as Bookrunner, Mandated Lead Arranger, Lender and Facility Agent of the Euler Hermes Export Credit. The banks, SACE and SIMEST were advised by Clifford Chance, and National Grid was advised by Linklaters.
Notes to Editors:
Renaud-Franck Falce, Head of Capital Markets for BNP Paribas in EMEA said: “We are proud to have supported National Grid in structuring and arranging the ECA-backed financing of the Viking Link interconnector, a tailor-made, cost-efficient financing package and the first ever multi-tranche Green Export Credit Facility. This transaction clearly evidences that ECA finance is fully compatible with Green lending practices – a framework that may be replicated going forward for other projects with sustainable features.”
Richard Hodder, Global Head of Export & Asset Finance and Head of EMEA Infrastructure said: “HSBC is very proud to have been able to support National Grid and participate in this milestone project. The Viking Link interconnector will benefit both the UK and Denmark’s power grids and will allow a more effective usage of renewable energy, a cause HSBC is deeply committed to”.
Callum Nash, Head of Corporate Coverage of NatWest said: “NatWest is delighted to have supported National Grid in the ECA-backed financing for the Viking Link interconnector. This is a very significant project in the transition to renewable energy for the UK and Europe, which strongly aligns to our ambitions in helping to address the climate challenge.”
Dario Liguti, Chief Underwriting Officer of SACE said: “We are very honored to be part of the first ever multi-ECA covered green loan, a milestone project to support the European transition to green energy. An intervention pattern we are keen to replicate in the future, as we fully embrace the increasing commitment of ECAs towards green energy and environmentally sustainable projects.”
Mauro Alfonso, Chief Executive Officer of SIMEST said: “With great pleasure we express our satisfaction for having had the opportunity, together with SACE, to support the first green export financing loan. This is evidence that the Italian public export support system can play an important role in the development of a sustainable finance for environmentally and socially responsible projects.”
About National Grid: National Grid is pivotal to the energy systems in the UK and the north eastern United States. We aim to serve customers well and efficiently, supporting the communities in which we operate and making possible the energy systems of the future. The decarbonisation of the energy system is one of the biggest challenges facing our world, and National Grid has a critical role to play in the acceleration towards a cleaner future. In November 2019, National Grid announced it plans to reduce its own direct greenhouse gas emissions to net zero by 2050.
In the UK:
- We own and operate the electricity transmission network in England and Wales, with day-to-day responsibility for balancing supply and demand. We also operate, but do not own, the Scottish networks. Our networks comprise approximately 7,200 kilometres (4,474 miles) of overhead line, 1,500 kilometres (932 miles) of underground cable and 342 substations.
- We own and operate the gas National Transmission System in Great Britain, with day-to-day responsibility for balancing supply and demand. Our network comprises approximately 7,660 kilometres (4,760 miles) of high-pressure pipe and 618 above-ground installations.
- As Great Britain’s System Operator (SO) we make sure gas and electricity is transported safely and efficiently from where it is produced to where it is consumed. From April 2019, Electricity System Operator (ESO) became a new standalone business within National Grid, legally separate from all other parts of the National Grid Group. This provides the right environment to deliver a balanced and impartial ESO that can realise real benefits for consumers as we transition to a more decentralised, decarbonised electricity system.
- Other UK activities mainly relate to businesses operating in competitive markets outside of our core regulated businesses; including interconnectors, gas metering activities and a liquefied natural gas (LNG) importation terminal – all of which are now part of National Grid Ventures. National Grid Property is responsible for the management, clean-up and disposal of surplus sites in the UK. Most of these are former gas works.
Find out more about the energy challenge and how National Grid is helping find solutions to some of the challenges we face at https://www.nationalgrid.com/group/news
Press Contact: Simmie Korotane, National Grid, +44(0)7971 343 383, [email protected]
About BNP Paribas Group: BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 71 countries, with approximately 199,000 employees, of which more than 151,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the European leader in consumer lending.
BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
To find out more on what BNP Paribas is doing on Climate Action, please visit:
Press contact: Sarah Shephard, BNP Paribas Media Relations, London +44(0)7468 471 044, [email protected]
About HSBC: To find out more on HSBC’s Sustainable approach, please visit: https://www.hsbc.com/our-approach/building-a-sustainable-future
Press Contact: Ryan KISIEL, Senior Media Relations Manager, London +44 (0) 20 3359 2080 [email protected]
About NatWest: NatWest Group has set out a new ambition to be a leading bank in the UK & RoI helping to address the climate challenge. NatWest Group has been the leading lender to the UK’s renewable energy sector by number of transactions for the past decade. Supporting the transition to a low carbon economy is at the heart of the bank’s new purpose, which commits to NatWest providing an additional £20bn funding and financing for climate and sustainable finance between now and 2022.
To find out more, please visit: https://www.rbs.com/rbs/sustainable-banking.html
Press contact: Anna Stephens, Head of Commercial and Private Media, London +44(0)7775 597 482, [email protected]
About SACE: SACE is Italy’s export credit agency and insurance-financial group specialized in supporting Italian economy and businesses through a wide range of solutions to support their competitiveness. For over forty years, SACE has been the partner of reference for Italian companies in their export and internationalization projects, forming with SIMEST the Italian Export and Internationalization Hub. SACE also collaborates with the banking system to facilitate companies' access to credit through its financial guarantees: a role enhanced by the extraordinary measures recently approved by the Government Decree 23/2020. With a portfolio of insured transactions and guaranteed investments of 134 billion euros, SACE serves over 23 thousand companies, especially SMEs, supporting their growth in Italy and in around 200 foreign markets, through a diversified selection of insurance-financial products and services.
Press contact: T. +39 06 6736888 / [email protected]
About SIMEST: SIMEST since 1991 has supported the growth and competitiveness of Italian companies operating abroad. Its lines of operations are subsidized loans, equity investments and support for export credit. It is 76% controlled by SACE, with which it constitutes CDP Group’s Export and Internationalization hub.
Press contact: T. +39 06 635777 / [email protected]
National Grid undertakes no obligation to update any of the information contained in this release, which speaks only as at the date of this release, unless required by law or regulation