US power utility Constellation has issued the first corporate green bond in the United States that can be used to finance nuclear energy projects. Constellation will use proceeds from the $900m, 30-year offering to support maintenance, expansion and life extensions of its nuclear power plants. Green bonds are offered specifically to finance projects or activities that deliver positive environmental or climate impacts.
The nuclear green bond offering was based on a new green financing framework developed by Constellation to enable the company to issue green financial instruments. Proceeds from the issuance can be used to finance green projects such as nuclear uprates, technologies to produce clean hydrogen, energy storage systems, wind repowering and carbon-free energy solutions for Constellation’s commercial customers.
Constellation, formerly Exelon Generation, owns and operates 21 nuclear reactors at 14 NPPs in the US 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. It also has an operating interest in Salem NPP units 1&2.
Crédit Agricole CIB, the corporate and investment banking arm of Crédit Agricole Group, served as Green Structuring agent in Constellation's nuclear green bond offering. “This groundbreaking transaction is a testament to Constellation’s ambitious sustainability efforts, and such leadership in the sustainable finance capital markets will undoubtedly serve as an inspiration for future global nuclear focused green bond issuances,” said Romina Reversi, Head of Sustainable Investment Banking for the Americas at Crédit Agricole CIB.
Sustainalytics – an independent environmental, social & corporate governance (ESG) and corporate governance research, ratings and analytics company - 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.
“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,” said Dan Eggers, Constellation Executive Vice President & CFO. “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.”
Constellation ranked ninth on Barron’s list of the 100 most sustainable US companies and was named one of America’s most just companies by JUST Capital and CNBC. Canada's Bruce Power was the first nuclear operator to issue green bonds in 2021and has issued CAD1.7bn ($1.2bn) in Green Bonds through three offerings. In 2022, Ontario Power Generation updated its Green Bond Framework to include eligible nuclear projects and subsequently issued a CAD300m green bond to finance refurbishment of its Darlington NPP. France's EDF launched a senior green bond issue in late 2023 for €1bn ($1.1bn) to support its existing nuclear fleet,
