EP Infrastructure issues its Green Finance Framework to link future financing to its transition strategy
24. 8. 2023
In line with its publicly communicated commitment, EP Infrastructure, a.s. (“EPIF”) has established the Green Finance Framework to allow the company to issue labelled financing instruments which may include bonds, loans, private placements, and other instruments. After establishing a robust transition strategy supported by medium-term and long-term targets, EPIF aims to link the proceeds from future issuances to execution of its transition plan. EPIF has clearly defined vision for all assets in a zero-carbon energy system and its future Capex spending will be centered on adaptation of its infrastructure base for a decarbonized future.
In defining the eligibility criteria for the assets to be financed through green instruments, EPIF has closely followed the substantial contribution criteria of the EU Taxonomy. The framework is prepared in line with the ICMA Green Bond Principles. Key assets identified as eligible for green financing are represented by the gas and power distribution grids and district heating systems (cogeneration plants including adjacent heating networks). EPIF expects to expand the portfolio of eligible assets in the future once there is increased visibility on the timing of adoption of renewable gases across the entire portfolio of EPIF’s assets.
The key decarbonization levers for the assets identified for green financing and key drivers of future Capex spending are represented by:
- Retrofit of the gas distribution network to enable adoption of renewable gases such as hydrogen while at the same time eliminating methane leakage in the transitional period when natural gas is still being used
- Conversion of the cogeneration heating plants away from lignite to a balanced mix predominantly based on gas-fired plants and biomass units
- Ensuring hydrogen readiness of the gas turbines in the cogeneration plants to gradually increase share of renewable gases and ultimately replace natural gas
- Reinforcing the power distribution grid to enable rapid deployment of renewable generation sources
- Reduction of Scope 2 emissions from purchased power for network losses by increasing reliance on zero-emission power
EPIF solicited a Second Party Opinion on its framework from (i) Shades of Green, now a part of S&P Global which assigned a Light Green shading to the framework and (ii) Sustainable Fitch which assigned a score of “Good” to the framework. Both SPO providers consider the framework as aligned with the ICMA Green Bond Principles.
“Ability to issue green instruments represents a major step for EPIF. It enables us to link future financing to our existing decarbonization strategy and to direct investments into projects with a positive decarbonization impact. We believe this step will increase the transparency of our ESG ambitions and contribute to diversification of our investor base,” says Gary Mazzotti, EPIF’s Chief Executive Officer.