Siemens Energy raises €1.5 billion with green bond to refinance Siemens Gamesa debt

Siemens Energy AG raised €1.5 billion ($1.63 billion) in its first-ever green bond issue, according to Dow Jones Newswires. Siemens Energy AG, the parent company of Siemens Gamesa Renewable Energy, will use the bond to refinance the existing debt of Siemens Gamesa Renewable Energy. The bond has two tranches of €750 million each, with 4% and 4.25% coupons. The bond proceeds may only be used for projects meeting environmental, social, and corporate governance (ESG) criteria and also to fund the acquisition of outstanding shares in Siemens Gamesa Renewable Energy.

The total order book for the bond was around €5.5 billion, indicating strong investor demand for the offering. Siemens Energy aims to become carbon-neutral by 2030 and align with the 2015 Paris Agreement goals.

This news arises in the context of Siemens Gamesa Renewable Energy registering a nearly $1 billion net loss for the last three months of 2022, citing equipment failures and service problems. The company's CEO, Jochen Eickholt, acknowledged equipment failures in both onshore and offshore wind turbines that led to higher warranty provisions. 

Despite the losses, Eickholt announced the reopening of two US-based manufacturing facilities in anticipation of an uptick in demand for wind power equipment. He said, ‘The negative development in our service business underscores that we have much work ahead of us to stabilise our business and return to profitability.’ The company is expected to be delisted and incorporated into parent Siemens Energy.

Green bonds are a growing financial instrument in the market. They can prove to be vital in achieving net-zero goals and securing stable, transparent, and beneficial investments to safeguard nature. DGB Group offers an 8% annual return on green bonds, proving that a healthy return on investment can be achieved in the carbon market. Investing with DGB, means proactively supporting sustainability and environmental projects worldwide whilst growing and diversifying your portfolio.