Cadent, the UK’s largest gas distribution network, has priced and agreed to issue the UK’s first transition bond – a 12-year EUR 500 million bond – to invest in the retrofit of gas distribution networks.
Innovative transition bonds are designed to help issuers shift to greener business activities and decarbonise their operations.
The move by Cadent, which delivers gas to 11 million homes and businesses throughout the North West, West Midlands, East of England and North London, is part of the company’s commitment to help deliver a low-carbon economy.
Cadent will use the proceeds of the bond to replace pipeline to facilitate in the future to carry hydrogen and other low-carbon gases and reduce methane leakage.
This work will help reduce greenhouse gas emissions in line with Cadent’s public commitment to reduce its GHG emissions by 2050.
Steve Hurrell, Cadent’s Chief Financial Officer, said: “Cadent is delighted to be the first UK business to issue a transition bond. This type of financing has an important role to play in fostering the transition to a low-carbon economy.”
Delphine Queniart, Global Head of Sustainable Finance & Solutions, Global Markets at BNP Paribas said, “Transition bonds are a vital tool in supporting the shift towards a low carbon economy, and they create a tangible decarbonisation roadmap for meeting the Paris agreement. As a bank committed to climate action, BNP Paribas is particularly proud to be working with Cadent in creating their transition bond framework and launching the UK’s first ever and ground-breaking benchmark Transition bond.”
