Italy’s A2A has introduced a €500 million green bond under the EU’s recently launched European Green Bond (EuGB) label. This bond issuance is notable as the first by a European corporate entity to apply the new framework, which aims to ensure transparency and credibility in green finance. The initiative reflects the growing focus on aligning financial instruments with sustainability goals set at European levels.
What does the new EuGB regulation entail?
The EuGB regulation, which became effective last month, was designed to counter greenwashing practices and bolster sustainable finance. All proceeds from EuGB-labeled instruments must align with the EU Taxonomy’s standards, with an allowance for up to 15% of funds to support projects in sectors awaiting finalized taxonomy criteria. Issuers must also commit to transparency by disclosing fund allocation, providing a green transition plan, and detailing how investments align with sustainability objectives.
How will A2A allocate the bond proceeds?
A2A has outlined four key categories for fund allocation: renewable energy, energy efficiency, transmission and distribution networks, and pollution prevention and control. Specific projects include the development of solar and wind power, energy storage systems, grid enhancements to facilitate renewable energy integration, and waste management initiatives. These efforts are targeted at advancing the company’s sustainability agenda, aligned with the EU’s green transition goals.
This issuance has drawn comparisons to similar initiatives in sustainable finance. While green bonds have been issued widely across Europe, the EuGB label introduces stricter criteria to ensure alignment with the EU Taxonomy, distinguishing it from earlier frameworks. A2A’s proactive adoption of this label positions it among early adopters aiming to meet elevated regulatory standards while addressing market demand for transparent and impactful sustainability investments.
The bond received significant interest from investors, with demand reportedly exceeding €2.2 billion, nearly 4.4 times the offering size. Such strong interest reflects the increasing investor appetite for credible green finance solutions as global markets look for instruments tied to tangible environmental outcomes.
Luca Moroni, CFO of A2A, remarked,
“This issuance confirms A2A’s position as reference institution in the development of sustainable finance instruments. This new product, together with the ESG instruments already adopted by the Group, supports the path towards ecological transition through investments aligned with the European Taxonomy, as detailed in the Strategic Plan.”
The EuGB regulation not only provides structure but also sets a precedent for future green bond issuances in Europe. By tying financial activities to taxonomy-aligned goals, the framework ensures that green bonds contribute meaningfully to sustainability objectives, offering enhanced clarity to investors and issuers alike.
A2A’s move reflects broader trends in corporate finance, where sustainability has become a central consideration. The demand for this bond suggests that investors prioritize transparency and alignment with recognized standards. Moving forward, the EuGB framework is likely to influence how companies structure their green financing, paving the way for more rigorous and accountable investments in sustainability.
