NBN Co raises $850 million from its green bond issuance

Tuesday, 29 August 2023 18:09

Wholesale broadband provider NBN Co has raised $850 million from its latest Australian green bond issuance in the domestic debt capital markets, which will be allocated to its sustainability projects and fibre-to-the-node to fibre-to-the-premises network upgrade program.

The net proceeds will be used to fund energy efficiency projects including expanding fibre to more homes and businesses.

The FTTN to FTTP upgrade program will enable up to 3.5 million premises to access residential wholesale download speed tier of close to 1Gbps by the end of 2025.

This includes the Federal Government’s announcement to contribute $2.4 billion equity towards the roll-out of fibre to an additional 1.5 million FTTN premises.

“Our network investment plan is taking energy-efficient fibre deeper into communities to meet the growing digital demands of Australia’s homes and businesses. Fibre is inherently more capable of delivering faster upload and download speeds and is generally more reliable than copper connections,” said NBN Co executive general manager group treasurer Fiona Trigona.

“The net proceeds from the latest green bond issuance will be allocated to refinance and finance energy efficiency projects related to the build out of fibre in the NBN network, which further support NBN’s strong commitment to delivering on our purpose to lift the digital capability of Australia.”

In February 2023, NBN committed to long-term company-wide emission reductions by 2050 (or sooner) in line with science-based net-zero via the Science-Based Targets initiative (SBTi).

Earlier this April, the company’s near-term company-wide emissions reduction targets were validated by the SBTi and are as follows:

- NBN Co commits to reduce absolute scope 1 and 2 GHG emissions 95% by FY2030 from a FY2021 base year.
- NBN Co also commits to reduce scope 3 GHG emissions from use of sold products 60% per device within the same timeframe.
- NBN Co further commits that 80% of its suppliers by spend covering purchased goods and services, capital goods, and downstream transportation and distribution will have science-based targets by FY2027.

The five-year transaction priced on 16 August and settled on 25 August raised $850 million.

Sixty-two domestic and international investors invested more than $500 million within the first hour post launch, which, NBN Co said, climbed to a total of $1.18 million bids by the time the book closed.

It printed $850 million at an issuance margin of 105 basis points over the benchmark semi-quarterly asset swap rate.

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NBN Co raises $850 million from its green bond issuance