Enel: A case study in transition finance using SLBs

12 minute read

Enel is the largest issuer in the sustainability-linked bond (SLB) market with USD 22.7bn outstanding and representing over 40% of their total public debt.

We conduct an analysis to see what we can learn from the most prolific issuer in this market, as SLBs become their benchmark debt product.

Enel is an Italian manufacturer and distributer of electricity and gas in 31 countries around the world. It has 63.4m customers for electricity and 6.0m in gas.

It has made strong statements around decarbonising its business; transitioning generating capabilities towards renewables and exiting the gas retail business by 2040.

To that end, it has shown a strong commitment to using the SLB as a transitional product, to raise attractive financing for its decarbonisation strategy. Enel’s SLB frameworks have focused on two KPIs - Scope 1 Direct GHG emissions, and Renewable Installed Capacity percentage. Scope 1 emissions will cover Enel’s generating operations, so there is arguably overlap with Renewable Capacity, whereas impact from gas retail business is not covered. Nevertheless, a commitment has already been made to exit the gas business, and sale and transport of gas make up only 8.8% of Q1 2022 revenue.

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