Sustainable finance
Fully in line with Terna’s strategy, which aims to combine investment and sustainability to drive growth and value creation, it is Terna’s ambition to play a leading role in the sustainable finance market. This strategy was also followed in 2024.
At 31 December 2024, the senior green bonds issued by Terna under its €12,000,000,000 Euro Medium Term Notes (EMTN) programme, and yet to reach maturity, amount to €2.25 billion, in addition to the two perpetual, subordinated green bonds issued in February 2022 and April 2024 on a standalone basis for a total €1.85 billion.
With regard to green bond debt, on 4 April 2024, Terna successfully launched a second issue of perpetual, subordinated, hybrid, non-convertible, green, fixed-rate bond for a total nominal amount of €850 million. The bond is non-callable for six years. The issue price was 99.745%, with a spread of 214.2 basis points over the midswap rate. The issue will pay an annual coupon of 4.750% until the first reset date scheduled on 11 April 2030 and will have an effective rate equal to 4.800%. From this date, unless the bond has been redeemed early, the hybrid bond will pay interest at the five-year Euro Mid-Swap rate, increased by an initial spread of 214.2 basis points, rising by a further 25 basis points from 11 April 2035 and by another 75 basis points from 11 April 2050.
In addition, on 10 February 2025 Terna launched a new single-tranche green bond issue, again as part of the EMTN programme. The issue has a total nominal value of €750 million, a term of 7 years and matures on 17 February 2032. The bond was issued at a price of 99.975%, with a spread of 90 basis points above the midswap rate and has an annual coupon interest of 3.125%.
These green issues are used to finance or refinance Eligible Green Projects. These are projects producing environmental benefits that meet certain criteria listed in the Green Bond Framework published by Terna in compliance with the 2021 “Green Bond Principles” drawn up by the ICMA (International Capital Market Association) and the EU Taxonomy. Terna’s Green Bond Framework is assessed by a “Second-Party Opinion” provider, Moody’s Investors Service, which in October 2023 assigned an opinion of “SQS1 Sustainability Quality Score (Excellent)”, the highest possible rating.
Specifically, the net proceeds from the issues are used to finance:
• projects that aim to increase renewable energy production – for example, infrastructure enabling renewable energy plants to be connected to the national grid or that allow for a larger volume of renewable energy to be injected into the grid;
• projects designed to cut CO2 emissions by reducing grid losses – for example, infrastructure designed to boost the efficiency of the electricity transmission grid;
• projects designed to ensure the quality, security and resilience of grid infrastructure;
• projects that aim to reduce land use and protect biodiversity.
The senior green bonds issued by Terna are also listed on the ExtraMOT PRO segment of Borsa Italiana (in addition to the listing on the regulated Luxembourg Stock Exchange), created to offer institutional and retail investors the opportunity to identify instruments whose proceeds are intended to finance projects with specific environmental and social benefits or impacts. Furthermore, the latest €750 million green bond, issued on 10 February 2025, was also listed on the electronic bond market (MOT) managed by Borsa Italiana.
As of 31 December 2024, Terna can also rely on several ESG-linked Term Loans for a total of €1.25 billion, three ESG-linked Revolving Credit Facilities linked to sustainability indicators for a total of about €4.2 billion and a Euro Commercial Paper (ECP) programme of €2 billion for the issuance of short-term conventional or “ESG notes”.
In fact, with regard to ESG-linked Revolving Credit Facilities note that on 15 April 2024 an amendment and restatement agreement was entered into to increase the amount of a Revolving Credit Facility to €2.255 billion (initially stipulated in May 2023 for €1.8 billion), and on 29 May 2024 a new ESG-linked Revolving Credit Facility was entered into with Intesa Sanpaolo for a total amount of €250 million and a term of five years. It should also be noted that, on 21 March 2025, Terna signed an ESG-linked Revolving Credit Facility for a total amount of €1.8 billion, aimed at refinancing the ESG Revolving Credit Facility signed on 17 December 2021, for a total amount of €1.65 billion.
Regarding ESG-linked Term Loans, an ESG-linked Credit Facility Agreement was signed with Unicredit on 4 July 2024 for a total of €200 million and a maximum term of five years. Subsequently, on 31 July 2024 an ESG-linked Credit Facility Agreement was signed with Banca Nazionale del Lavoro and CaixaBank for a total of €400 million and a duration of five years. Moreover, on 4 October 2024 an ESG-linked Credit Facility Agreement was signed with Intesa Sanpaolo for a total of €400 million and a duration of five years. Lastly, on December 18, 2024, two other ESG-linked Credit Facility Agreements were signed for a total of €250 million and a duration of five years, respectively with Banco BPM for €150 million and with Mediobanca - Banca di Credito finanziario S.p.A. for €100 million.
In line with Terna’s commitment to sustainability and social and environmental responsibility, the Share buyback programme to service the 2024-2028 Performance Share Plan was concluded in September, with a total outlay of about €8 million and the purchase of 998,428 own shares (representing about 0.050% of the share capital). The Programme provides a mechanism linked to the achievement of specific ESG targets by the Company.
Terna’s leadership in sustainable finance is widely recognised in the market which, since 2018, has shown a strong appetite for the green bonds issued. In addition to its inclusion in the main ESG indices, from January 2021, Terna is the first Italian electric utility to join the Nasdaq Sustainable Bond Network, the sustainable finance platform operated by Nasdaq that brings together investors, issuers, investment banks and specialist organisations.
Terna continues to be a member of the CFO Coalition for the SDGs, which is building on the work of the CFO Taskforce for the SDGs, the initiative launched by the UN Global Compact at the end of 2019 to develop sustainable finance and of which Terna was one of the founding members. The Coalition aims to continue to promote sustainability, scale up its global community and follow the example set by the CFOs that founded the Taskforce.
Further confirmation of the commitment to playing an active role in developing sustainable finance, Terna is taking part in the Corporate Forum for Sustainable Finance, a network of major European businesses committed to the development of sustainable finance as a means to promote a more sustainable and responsible society.
Finally, Terna, both individually and as a member of the above Corporate Forum on Sustainable Finance, will continuously monitor developments in European legislation, with particular regard to the impact on sustainable finance.
At 31 December 2024, the senior green bonds issued by Terna under its €12,000,000,000 Euro Medium Term Notes (EMTN) programme, and yet to reach maturity, amount to €2.25 billion, in addition to the two perpetual, subordinated green bonds issued in February 2022 and April 2024 on a standalone basis for a total €1.85 billion.
With regard to green bond debt, on 4 April 2024, Terna successfully launched a second issue of perpetual, subordinated, hybrid, non-convertible, green, fixed-rate bond for a total nominal amount of €850 million. The bond is non-callable for six years. The issue price was 99.745%, with a spread of 214.2 basis points over the midswap rate. The issue will pay an annual coupon of 4.750% until the first reset date scheduled on 11 April 2030 and will have an effective rate equal to 4.800%. From this date, unless the bond has been redeemed early, the hybrid bond will pay interest at the five-year Euro Mid-Swap rate, increased by an initial spread of 214.2 basis points, rising by a further 25 basis points from 11 April 2035 and by another 75 basis points from 11 April 2050.
In addition, on 10 February 2025 Terna launched a new single-tranche green bond issue, again as part of the EMTN programme. The issue has a total nominal value of €750 million, a term of 7 years and matures on 17 February 2032. The bond was issued at a price of 99.975%, with a spread of 90 basis points above the midswap rate and has an annual coupon interest of 3.125%.
These green issues are used to finance or refinance Eligible Green Projects. These are projects producing environmental benefits that meet certain criteria listed in the Green Bond Framework published by Terna in compliance with the 2021 “Green Bond Principles” drawn up by the ICMA (International Capital Market Association) and the EU Taxonomy. Terna’s Green Bond Framework is assessed by a “Second-Party Opinion” provider, Moody’s Investors Service, which in October 2023 assigned an opinion of “SQS1 Sustainability Quality Score (Excellent)”, the highest possible rating.
Specifically, the net proceeds from the issues are used to finance:
• projects that aim to increase renewable energy production – for example, infrastructure enabling renewable energy plants to be connected to the national grid or that allow for a larger volume of renewable energy to be injected into the grid;
• projects designed to cut CO2 emissions by reducing grid losses – for example, infrastructure designed to boost the efficiency of the electricity transmission grid;
• projects designed to ensure the quality, security and resilience of grid infrastructure;
• projects that aim to reduce land use and protect biodiversity.
The senior green bonds issued by Terna are also listed on the ExtraMOT PRO segment of Borsa Italiana (in addition to the listing on the regulated Luxembourg Stock Exchange), created to offer institutional and retail investors the opportunity to identify instruments whose proceeds are intended to finance projects with specific environmental and social benefits or impacts. Furthermore, the latest €750 million green bond, issued on 10 February 2025, was also listed on the electronic bond market (MOT) managed by Borsa Italiana.
As of 31 December 2024, Terna can also rely on several ESG-linked Term Loans for a total of €1.25 billion, three ESG-linked Revolving Credit Facilities linked to sustainability indicators for a total of about €4.2 billion and a Euro Commercial Paper (ECP) programme of €2 billion for the issuance of short-term conventional or “ESG notes”.
In fact, with regard to ESG-linked Revolving Credit Facilities note that on 15 April 2024 an amendment and restatement agreement was entered into to increase the amount of a Revolving Credit Facility to €2.255 billion (initially stipulated in May 2023 for €1.8 billion), and on 29 May 2024 a new ESG-linked Revolving Credit Facility was entered into with Intesa Sanpaolo for a total amount of €250 million and a term of five years. It should also be noted that, on 21 March 2025, Terna signed an ESG-linked Revolving Credit Facility for a total amount of €1.8 billion, aimed at refinancing the ESG Revolving Credit Facility signed on 17 December 2021, for a total amount of €1.65 billion.
Regarding ESG-linked Term Loans, an ESG-linked Credit Facility Agreement was signed with Unicredit on 4 July 2024 for a total of €200 million and a maximum term of five years. Subsequently, on 31 July 2024 an ESG-linked Credit Facility Agreement was signed with Banca Nazionale del Lavoro and CaixaBank for a total of €400 million and a duration of five years. Moreover, on 4 October 2024 an ESG-linked Credit Facility Agreement was signed with Intesa Sanpaolo for a total of €400 million and a duration of five years. Lastly, on December 18, 2024, two other ESG-linked Credit Facility Agreements were signed for a total of €250 million and a duration of five years, respectively with Banco BPM for €150 million and with Mediobanca - Banca di Credito finanziario S.p.A. for €100 million.
In line with Terna’s commitment to sustainability and social and environmental responsibility, the Share buyback programme to service the 2024-2028 Performance Share Plan was concluded in September, with a total outlay of about €8 million and the purchase of 998,428 own shares (representing about 0.050% of the share capital). The Programme provides a mechanism linked to the achievement of specific ESG targets by the Company.
Terna’s leadership in sustainable finance is widely recognised in the market which, since 2018, has shown a strong appetite for the green bonds issued. In addition to its inclusion in the main ESG indices, from January 2021, Terna is the first Italian electric utility to join the Nasdaq Sustainable Bond Network, the sustainable finance platform operated by Nasdaq that brings together investors, issuers, investment banks and specialist organisations.
Terna continues to be a member of the CFO Coalition for the SDGs, which is building on the work of the CFO Taskforce for the SDGs, the initiative launched by the UN Global Compact at the end of 2019 to develop sustainable finance and of which Terna was one of the founding members. The Coalition aims to continue to promote sustainability, scale up its global community and follow the example set by the CFOs that founded the Taskforce.
Further confirmation of the commitment to playing an active role in developing sustainable finance, Terna is taking part in the Corporate Forum for Sustainable Finance, a network of major European businesses committed to the development of sustainable finance as a means to promote a more sustainable and responsible society.
Finally, Terna, both individually and as a member of the above Corporate Forum on Sustainable Finance, will continuously monitor developments in European legislation, with particular regard to the impact on sustainable finance.
