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Northern Powergrid secures £300m in Britain's first-of-its-kind bond issuance

Image: Northern Powergrid.

Image: Northern Powergrid.

Northern Powergrid has secured £300 million from a bond issuance to help fund its new Green Finance Framework.

Published yesterday (9 June), the company’s new Framework for Decarbonisation: Northern Powergrid’s Green Finance Framework sets out the company’s eco-focused funding strategy. This covers its investment plans for the power sector in the North East, as well as how they will help boost the economy of the region.

The Distribution Network Operator (DNO) says that it is the first in Great Britain to power its business investment plans and issue bonds under a new Green Finance Framework. The £300 million raised thus would carry an interest rate of 1.875% fixed for 42 years.

The proceeds will be invested in projects that Northern Powergrid say will support low-carbon generation, in the process curbing energy-related environmental impacts across the region.

Tom Fielden, Northern Powergrid’s finance director, said it makes “perfect sense for us to provide an opportunity for debt investors to be able to participate in funding the investments that drive a lower-carbon future for our region.

“Our ‘A Framework for Decarbonisation’ strategy sets out the link between the funding we attract from the financial markets and the way that the investment it supports can deliver long-term environmental benefits for our customers across the North East, Yorkshire and northern Lincolnshire.”

The strategy has undergone an independent assessment by DNV-GL, to ensure that it meets International Capital Markets Association and Loan Markets Association standards.

DNOs have an essential role to play in the push to net zero in the UK, allowing renewable and clean energy generation to be connected to customers, along with providing flexibility.

To this end, Northern Powergrid has already launched a number of trials to update its network and reduce emissions. For instance, in December it announced a trial of transformers that could reduce core losses by up to 90%. These losses cause approximately 1.5% of the UK’s greenhouse gas emissions.

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