Constellation issues first US nuclear green bond

A green bond is a financial instrument that is issued specifically to finance projects or activities that deliver positive environmental or climate impacts, Constellation noted. It allows investors to actively support investments that promote sustainability and help address environmental challenges.

The nuclear green bond offering was based on a new green financing framework that Constellation developed to enable the company to issue green financial instruments. Proceeds from the issuance can be used to finance green projects such as nuclear power uprates, technologies to produce clean hydrogen, energy storage systems, wind repowering and carbon-free energy solutions for Constellation's commercial customers.

Crédit Agricole CIB - the corporate and investment banking arm of France's Crédit Agricole Group - served as Green Structuring agent in Constellation's nuclear green bond offering.

Independent environmental, social and corporate governance (ESG) and corporate governance research, ratings and analytics firm Sustainalytics has verified the environmental benefits of Constellation's framework and its alignment with the Green Bond Principles, 2021 issued by the International Capital Markets Association and Green Loan Principles, 2023 by the Loan Market Association. These voluntary guidelines for issuing or borrowing green financing instruments support a green label for Constellation's bond issuance.

Baltimore-based Constellation operates 14 nuclear power plants in the USA with a combined generating capacity of more than 19,000 MWe. These are: Braidwood, Byron, Calvert Cliffs, Clinton, Dresden, FitzPatrick, LaSalle, Limerick, Nine Mile Point, Peach Bottom, Quad Cities, R E Ginna, Salem and South Texas Project.

"Elected officials on both sides of the aisle, climate and sustainability advocates and the general public are increasingly recognising the value nuclear energy delivers, not only for its unmatched 24/7 reliability, but for its positive environmental impact as a clean energy resource," Constellation Executive Vice President and CFO Dan Eggers said. "The strong market response shows the investment community agrees nuclear energy is a unique clean-energy technology that is going to play a critical role for decades to come and is a safe, long-term investment.

"With the nation's first-ever corporate nuclear green bond issuance as part of our long-term financing mix, Constellation and the market have again confirmed: Nuclear investments are long-term sustainability investments."

Since becoming the first nuclear operator in the world to successfully issue green bonds in 2021, Canada's Bruce Power has now cumulatively issued CAD1.7 billion (USD1.2 billion) in Green Bonds through three offerings.

Also in Canada, Ontario Power Generation updated its Green Bond Framework in July 2022 to include eligible nuclear projects. It subsequently issued a CAD300 million green bond to finance the refurbishment of its Darlington nuclear power plant.

In November 2023, France's EDF launched a senior green bond issue dedicated to the financing of its existing nuclear fleet, for a nominal amount of EUR1 billion (USD1.1 billion).