Neste Raises EUR 700 Million For Renewable Energy Expansion

Neste Corporation has issued a EUR 700 million five-year green bond with a fixed coupon of 3.750%, successfully. The bond was issued under the company's revised Euro Medium Term Note (EMTN) programme and will be listed on Euronext Dublin. In spite of difficult conditions prevailing in the renewable energy sector, the bond attracted strong investor demand, which indicates faith in Neste's green strategy and long-term sustainability aspirations.

The proceeds of this bond issue will be invested in expanding Neste's Rotterdam refinery, a strategic development project that will increase its renewable energy capability. The Rotterdam refinery will become the world's largest renewable diesel and SAF facility. This development is part of Neste's continued efforts to develop renewable energy solutions and contribute to the global fight against climate change.

The funds from the green bond will specifically go towards projects under Neste's Green Finance Framework, which will ensure that the money is used strictly for environmentally sustainable initiatives. The expansion of the Rotterdam refinery is a key aspect of this framework as it will hugely improve Neste's capacity to produce renewable diesel and SAF, both of which are essential in curbing carbon emissions in the transport industry.

Anssi Tammilehto, the Interim Chief Financial Officer of Neste, was pleased with the successful offering, especially against the backdrop of recent setbacks in the renewable energy sector. Amidst the turbulent market conditions, Tammilehto clarified that Neste has a definite plan for the future and continues to focus on propelling growth in renewable energy. He further stated, "We are delighted to witness high-quality investor appetite in this new issue.". Net proceeds from this Green Bond are to be directed to our growth of the Rotterdam refinery, which is to be the largest renewable diesel and sustainable aviation fuel plant in the world.

The green bond issuance reaffirms Neste's position as a leader in the renewable energy industry and its capacity to secure high-quality investors amid a tough market climate. It also confirms the increasing significance of sustainable finance within the energy sector, where companies increasingly look to link their funding strategy to environmental, social, and governance (ESG) considerations.

Neste's Rotterdam refinery, the linchpin of the company's strategy, is at the forefront of its drive to develop more sustainable energy sources. The refinery produces one of the biggest volumes of renewable diesel worldwide, which is produced from waste and residue oils and fats. Renewable diesel is a drop-in fuel that may be utilized in conventional diesel engines and infrastructure, rendering it an important solution to diminish carbon emission from heavy transport and industrial processes.

Apart from renewable diesel, the refinery is also a major contributor to the production of sustainable aviation fuel (SAF), which is manufactured from renewable raw materials and reduces carbon emissions in the aviation sector. With increasing global demand for SAF, Neste's investment in increasing its production capacity makes it a top supplier in the expanding sustainable aviation fuel market.

The green bond was overseen by a syndicate of major financial institutions such as BNP Paribas, Danske Bank, ING Bank, Nordea Bank, and UniCredit Bank, which were the joint lead managers for the issuance. This underscores the support of the financial sector for Neste's green projects, cementing the reputation of the company as a trailblazer in sustainable finance.

Neste's green bond success is one of a larger trend as companies are increasingly using green bonds and other sustainable financing mechanisms to finance their environmental and social programs. Green bonds, which are bonds used to raise funds for projects with a positive environmental outcome, have been popular in recent years as investors look to make their portfolios ESG-aligned. Neste's issuance of bonds is evidence of increasing appetite for green investments, as the company attracted a lot of interest from investors willing to finance initiatives that respond to climate change and push renewable energy.

The bond issue also reflects Neste's wider ambitions towards sustainability and moving towards a circular economy. Through its renewable energy and production of sustainable fuel, Neste is contributing towards a decrease in the use of fossil fuels and a faster development of cleaner and more sustainable forms of energy.

Finally, Neste's green bond issuance worth EUR 700 million is another milestone that reflects the company's relentless pursuit of increasing its renewable energy capacity and helping the world shift towards cleaner energy solutions. With this raised capital from its green bond, Neste is set to consolidate its position as a front-runner in the renewable energy industry, especially in the manufacture of renewable diesel and sustainable aviation fuel. As the world keeps struggling with environmental issues, Neste's dedication to sustainability and its capacity to attract quality investors indicate a bright future for the company and its green projects.