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A new CDP Bond to finance upgrading projects related to the national water supply network
CDP successfully closed its first Sustainability “Hydro” Bond, issued under the Debt Issuance Program (DIP), with demand strongly outstripping supply. It is the first Sustainability “Hydro” Bond launched in the international capital market by an Italian issuer, dedicated to the development and modernization of the Country's water-sector, characterized by a significant infrastructural gap and an average annual per capita investment substantially lower than those recorded in other European countries.
The Italian water sector is affected by a series of criticalities like, among others, the management dimensional fragmentation (with 62 Local Authority Water Boards and 92 Water Catchment Areas) and a slow and non-homogeneous Governance implementation at the national level, which over time have prevented its development. In this context, with inadequate investment level with respect to actual needs and growing tariffs, the first CDP Sustainability Bond will finance local investments with the aim of resolving these market failures.
Read more about Italian water sector
The fixed rate note issue, addressed to institutional investors, for a nominal value of €500 million, is unsubordinated and unsecured, with a tenor of 5 years (maturity date September 2023) and an annual coupon of 2.125%. The issue is consistent with the CDP Green, Social and Sustainability Bond Framework, in line with the Sustainability Bond Guidelines released by the International Capital Market Association in June 2018, and inspired by the UN Sustainable Development Goals.
The Sustainability “Hydro” Bond focuses on UN SDG 6: “Clean Water and Sanitation”.
For the transaction, CDP obtained a Second Party Opinion provided by Vigeo Eiris.