National Grid’s Viking Link Interconnector secures the first multi ECA green loan worth US$743m

UK – Mercredi 17/06/2020 – energiesdelamer.eu. 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.

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.”