Enel SLBs: FY 2023 generation figures released

4 minute read

Enel, Italian utility and prolific issuer of Sustainability-Linked Bonds, reported its 2023 generation mix on 21 Mar 2024.

SLB investors needs to know the intensity of this power to understand if their bonds will receive a step-up coupon.

Our earlier analysis concluded that the 2023 target, to reduce emissions intensity of power generation to 148gCO2e/kWh was not on track. This would result in ten SLBs receiving a 25bp step-up coupon.

The recent results show good movements towards lower emissions generation in 2023. Coal reduced 45% year-on-year and renewables increased 13%. This was alongside lower total generation which has supported lower usage of gas.

The emissions intensity target is still a stretch, and would require substantial emissions efficiency savings to achieve. Nevertheless the probability of it being met has increased with this reporting.

Bond pricing shows a mixed picture; some EUR bonds are implying a 25% probability of the target being missed, and other USD bonds suggest the target will be met. When the final result is reported, this should correct.

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