Public Power Corporation raised 650 million euros from its five-year bond issue with an interest rate of 3.875%, it announced on Thursday.
Bids came to more than €3 billion, or six times the initial asked sum of €500 million.
The proceeds of the bond will be used to repay existing loans, investments and general purposes. PPC’s previous bid to raise funds in capital markets was in 2014 when it raised €700 million, of which €500 million was through a five-year bond with an interest rate of 5.5%.
The successful completion of the bond loan issue is considered to be a vote of confidence in PPC’s business plan and the Greek economy in general.
In comments made to the Athens-Macedonian News Agency, George Stassis, chairman and CEO at PPC, said that the success – beyond the oversubscription and the low level of the interest rate – is mostly based on the unprecedented and high rate of participation by foreign investors (around 70%), while 50% of the issue was covered by high prestige and global investors.
The sustainability-linked bond’s return is related to achieving specific environmental targets.
More specifically, PPC is committed to reducing CO2 emissions by 40% in 2022, compared with 2019, and to pay higher interest rates to investors if it fails.
PPC’s business plan envisages a reduction of CO2 emissions by 62% in the period 2019-23 (from 19.7 million tons to 7.5 million), which will be largely achieved with the retirement of all lignite units except Ptolemaida 5, which is expected to begin operating in 2022 and be upgraded with greener technology in 2028.