Telefónica has become the first company in the telecoms sector to issue a green bond with a €1 billion, five-year offering.
The operator says it is aiming to offer the greenest network in the market: green bonds are used to fund projects that have positive environmental and/or climate benefits.
In a statement, Telefónica said the offering was very well received by institutional investors, with the demand allowing the coupon to be fixed at 1.069%, up to 25 base points below the initial price indications. The final book stood at €5.2 billion, equivalent to an oversubscription of more than five times. In total, more than 310 investors participated, of which more than 80% were international investors and half were green investors.
Telefónica will use the proceeds of the bond to finance projects that increase the company's energy efficiency, such as transforming the network from copper to fibre optics in Spain.
Cutting carbon with FTTH
According to Telefónica, fibre to the home (FTTH) is 85% more energy efficient way of providing customer access than the copper network.
In three years, the initiative has saved 208 GWh, which represents a saving of 56,500 tons in CO2 emissions, Telefónica says. This is the equivalent to the carbon captured by more than 900,000 trees.
Further, the migration allows Telefónica to close around one ADSL plant a day and recycle all the material as part of its commitment to the circular economy.
A statement from the company said: “The migration to fibre, together with the use of renewable energy and other energy efficiency initiatives, is allowing Telefónica to consolidate its telecommunications network as one of the most sustainable in the market in terms of energy and CO2. “
Earlier this month, Telefónica was named for the fifth year in a row as one of the 126 entities on the 'Climate A-List' published by the not-for-profit CDP (Climate Disclosure Project) organisation.
Enrique Blanco, Global GCTIO at Telefónica, said, "Managing climate change is a priority for Telefónica. More than 50% of the electricity the company uses today comes from renewable sources. We have stabilised our energy consumption despite traffic having increased by 107% in the last three years, improving our efficiency by 52%.”
The green bond market has grown from $37 billion (€32.35 billion) issuances in 2014 to $162.5 billion (€142 billion) in 2017, according to the Climate Bonds Initiative.