Published: February 1, 2022
This is a new funding strategy for Raiffeisen Bank, which already has a strong track record in green bond issuances.
In December, Raiffeisen Bank International (RBI) announced it had signed a €200mn Green Guarantee Facility Agreement (GGFA) with Spanish renewable energy company Siemens Gamesa. At a time when green financing products are starting to hit the mainstream, the GGFA marks a first for RBI.
“On the trade finance side, Siemens Gamesa was our initial green transaction and a few other transactions are in preparation,” Peter Lennkh, RBI board member in charge of corporate banking, tells EMEA Finance. “While sustainable trade finance is still in its infancy, we expect demand for such transactions to increase significantly from 2022 onwards.”
The funding in question follows the ‘use of proceeds’ concept, which means the business being financed must fulfill certain criteria. Specifically, the asset or project in question needs to qualify as ‘green’.
“In terms of our agreement with Siemens Gamesa, this includes the support of eligible green projects, such as wind power plants located outside legally protected biodiversity areas,” says Lennkh. “The green criteria are usually derived from the EU taxonomy or the RBI Green Bond framework.”
With this kind of financing, the idea is to support the client in its aspirations towards net zero. However, it also means pushing for transparency in how the client plans to achieve this goal. Any projects that are funded will need to be evaluated once a year, in a report documenting their environmental impact.
No debutant
“At Siemens Gamesa, we are focused on being ever more sustainable across the board and this deal is another step in that direction,” said Gonzalo Onzain, head of capital markets and bank relations at Siemens Gamesa. “This guarantee line will serve our onshore, offshore and service business to support our customers and the global energy transition.”
Siemens Gamesa itself is no stranger to green guarantee lines.