The Green Bond has two tranches: a EUR 750 million tranche at a fixed rate, with a maturity of 3 years, with an annual coupon of 4%, and a EUR 750 million tranche at a fixed rate with a maturity of 6 years, with an annual coupon of 4.25%. The total order book across the two tranches was approximately EUR 5.5 billion.

Proceeds from the Green Bond placement can only be used for projects and activities that meet eligible Environmental, Social and Governance (ESG) criteria. Siemens Energy will use the proceeds from the bond to re-finance existing debt of Siemens Gamesa Renewable Energy (SGRE), a key player in the wind-power business in which Siemens Energy holds a 97.79% majority stake. Portions of the net proceeds may also be used to refinance the acquisition of outstanding shares of Siemens Gamesa by Siemens Energy.

“ESG sits at the core of our strategy, and this is also embedded in our financing actions. Driving sustainability across our own portfolio and operations will drive profitable growth,” said Maria Ferraro, CFO of Siemens Energy. “With the successful issuance of our first bond, which meets our Green Bond Framework, I am very pleased to see that the capital markets are confident in our strategy to become the leader in the energy transition.”

The issuance is part of Siemens Energy’s Green Bond Framework, established in January 2023 to allow the company to further develop its sustainable finance vision. To verify that the framework meets ESG criteria, an industry-standard practice is to commission an independent review, also known as a second party opinion. For this purpose, Siemens Energy obtained a second party opinion from the leading ESG ratings agency, Sustainalytics, which confirmed that Siemens Energy’s Green Bond framework is aligned with the International Capital Market Association’s (ICMA) Green Bond Principles 2021.

A framework for EU-labeled Green Bonds has been agreed to by the European Union for bonds that meet the requirements of the EU taxonomy for sustainable activities. However, this framework has yet to be formally approved by the EU Parliament and its member states, and as such the label is still unavailable for currently issued bonds.