Blog from Silvia Zinetti: The Hera Group experience with green bonds: energy efficiency is the top financed category

Green Bonds have been around for a decade. The World Bank first issued them in 2008 for an equivalent amount of USD 10 million, but starting to take off in 2013 and growing since. In 2017 an equivalent amount of USD 157 billion were issued worldwide.[i]

What types of project are mostly financed with Green Bonds? Are there any tangible results? Those are questions I would like to focus on this article, and in particular on clean energy projects, with data collected from the Hera Group and its experience with the Green Bonds.

Hera was the first Italian utility to launch a Green Bond to finance or refinance sustainable projects, in line with its commitment to sustainable development. In July 2014 the company offered a ten-year bond for an equivalent amount of EUR 500 million, envisaging a coupon of 2.375% and a return of 2.436%.[ii] The offer received great attention in Europe, especially from investors in France, Germany and Great Britain in 2014, and outside Europe in 2015. The following figure shows the Green Bond’s filing date by country and by year (2014 and 2015).[iii]


Sustainable Projects 

The list of projects eligible for funding were established on the basis of specific environmental criteria, and successively confirmed by a global quality assurance and risk management company to ensure the appropriate allocation of the funds. Every year, the external and independent company certifies that Hera is proceeding with the promised green investments.

A total of 26 projects were financed or refinanced from 2006 to 2016 for a total investment of €732M and covering the amount of the Green Bond of €500M. Ten projects in renewable energy for a total of €57,4M, seven projects in energy efficiency for a total of €223,4M, four waste to energy plants projects for a total of €173,2M, four wastewater treatment plants projects for a total of €34M, and one separate waste collection project for a total of €13,7M.

As shown in the figure above, energy efficiency is the project category that received the majority of the Green Bonds amount in terms of €M invested, followed by the categories waste-to-energy, renewable energy, wastewater treatment, and separate waste collection.

The following figure shows the aggregate number of total investment by project category, and confirming the importance of energy efficiency in terms of total amount invested in €M.

The projects financed cover four main area of sustainability, with the majority of the funds allocated to fight against climate change (€284M), and followed by emission reduction (€173M), water purification quality (€34M), and sustainable waste management (€12M).

To better understand, I divided the environmental category into project category and specific projects. Waste-to-energy plants, district heating networks projects, and cogeneration plants projects received the most of the funds. The following figure illustrates the breakdown of the projects, by environmental category, project category, specific projects, and related investments in €M.

Key Performance Indicators

Hera established specific key performance indicators (KPIs) for each project to monitor their performance over time.[i] Below is a snapshot of the aggregated results for the energy efficiency and renewable energy project’s category for the period 2006 – 2016.



Based on the analyzed data from the Hera Group, the following points are made:

  • Energy efficiency plays a significant role in the total investments for sustainable projects financed with the Green Bonds. Other projects category include waste-to-energy, renewable energy, wastewater treatment, and separate waste collection.
  • All the projects produced tangible results, and were measured with KPIs, to include Primary Energy Savings, Avoided CO2 Emissions, Net Electricity Produced, and Thermal Energy Produced. Because KPIs are project-specific, only partial aggregation was possible from the project category (energy efficiency and renewable energy).
  • The Hera Group is a great example of a company that is investing in sustainable energy projects and achieving results by combining all the different available instruments, from Green Bonds to White Certificates (see my previous article).
  • Green Bonds are part of the several instruments available to companies to invest in sustainable projects. There is no good or bad, better or worse. Companies should evaluate which instrument is better for them, based on the technology, market, and regulation.


About the Author: Silvia Zinetti, a regular contributor to EiD, is a sustainable energy expert and policy advisor, based in Arlington, Virginia.



[i] List of projects financed with Green Bonds 




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