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S&P: financing for UAE, Africa & Peru water projects receives high Green Evaluation score

Spanish engineering company ACS Servicios Comunicaciones y Energía S.L.’s (ACS SCE) €750 million of green notes has received S&P Global Ratings’ strongest Green Evaluation score.

The Evaluation is an assessment of the estimated environmental benefit of a given financing. The high score is supported by proceeds allocated to renewable energy and water projects in countries with medium high water stress.

The transaction has achieved S&P’s strongest Green Evaluation score of E1 on a scale of E1 (highest) to E4 (lowest) and an overall score of 83.

The evaluation reflects a high Mitigation score of 83 which is largely supported by proceeds allocated to renewable energy and water projects in countries with medium carbon intensity grids and medium high water stress, coupled with an adjustment that reflects the role the technologies play in the transition to a low carbon economy.

Water projects account for 12% of proceeds and involve:

  • Seawater desalination projects that provide marginal system enhancements in high water stress regions of United Arab Emirates, Africa and Peru;
  • Wastewater treatment and recycling and water distribution network improvement in Peru, which S&P believe provides water system enhancements.

ACS Servicios Comunicaciones y Energía S.L. (ACS SCE) plans to issue €750 million of direct, general, unconditional, unsubordinated, and unsecured notes in April 2018.

The proceeds of the offering will be used to finance or refinance the development, construction, installation, and maintenance of new or existing eligible green projects, assets, or activities.

These include renewable energy, energy distribution and management, water and wastewater management, and energy efficiency projects for which ACS SCE has either a full or partial ownership stake across North America, South America, Europe, Asia and Africa.

The evaluation considers the overall net environmental impact of each technology relative to the local energy grid and/or water system. The overall grid carbon intensity factor, aggregated across all countries where projects are located, is considered medium. The aggregated water stress factor is medium-high.

Renewable energy technology and wastewater treatment projects are considered long-term green solutions and are placed at the top end of the ratings agency’s carbon and water hierarchies.

S&P said that water-related projects in the pool, for which 12% of the bond proceeds are assigned, offer significant environmental benefits.

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