The Group of companies’ overriding financial objectives target to secure long term visibility and flexibility.
Debt Information
Side relief Braemar (I), by Per Hurum.
Financial objectives and Green financing framework
The Group of companies’ overriding financial objectives target to secure long term visibility and flexibility through business cycles and are structured around three key principles;
i) the financial position of the Company shall be strong and built on conservative leverage and solid liquidity position
ii) each company within the Group of companies must optimize its own non-recourse debt financing taking into account underlying market fundamentals and outlook for the respective business and relative cost of capital.
iii) with the aim to accelerate growth, subsidiaries within the Company’s high growth and capital-intensive business segments, are actively investigating and considering various means of sourcing external capital, hereunder a broad set of equity options including listing.
Further, to position the Group of companies for the upcoming implementation of the EU taxonomy directive and to formalize the Company’s commitment to sustainable financing, green financing frameworks related to the Group of companies were established during 2020 under which the group’s first green bond and green bank financing was raised.
Green Finance Framework
Increasing the share of renewable energy in the global energy mix is crucial to deliver on the targets of the 2015 Paris Agreement
The Company’s investments throughout the renewable energy value chain will promote the transition towards a low-carbon and climate resilient future. To support this and positioning the Group of companies for the EU taxonomy, the Company established in 2020 a Green Finance Framework (GFF) with an eligibility assessment from DNV and issued a NOK 700 million green bond loan in September 2020. Another NOK 700 million green bond loan was issued in July 2021. Both bonds are to be used for eligible green investments as defined in the GFF. The GFF enables the Company, to issue green bonds or loans to finance what has been defined to be green projects. The framework is aligned with the ICMA Green Bond Principles and the LMA Green Loan Principles issued in 2018.
Green Finance Framework Reporting 2021
The GFF covers activities within the Renewable Energy segment and parts of the Wind Service segments as described below and will mainly apply to investments made via the holding companies for the said respective business segments, FOR and FOO. Investments made by other subsidiaries may however also be funded under the GFF when they are in line with the relevant defined criteria.
Wind Service
Investments and related expenditures directed towards upgrading existing turbine transport and installations vessels, such as crane and equipment upgrades and/or replacements, and potentially building new vessels, to meet estimated future market requirements of increased installation capacity.
The framework also outlines the process to evaluate, select, track and report on such investments. Each Green Finance Instrument issued under this framework should in their relevant transaction documentation refer to the GFF.
As part of establishing the GFF, the Company has by the assistance of Fred.Olsen & Co. procured the establishment of an internal Green Finance Committee (GFC) with participants from
finance, operations/technical and HSEQ departments in the relevant Company subsidiaries. The companies will nominate projects to the GFC, who will approve eligible green investments in the green investment portfolio.
In 2021 the GFC assessed and approved two specific projects as eligible green investments. EUR 10 million has been allocated to the upgrade of the crane on Bold Tern, one of the self-propelled jack-up vessels specially designed for transportation, installation and service of offshore wind turbines. In addition, EUR 60 million has been allocated to part finance the construction of Högaliden windfarm. The total green finance facility out of the Company is NOK 1 400 million. As of 31 December 2021, a total of EUR 70 million (NOK 712 million) is allocated as eligible for green financing.
Renewable Energy
Investments and related expenditures directed towards the development, construction, installation, improvement, operation, repair and maintenance of renewable energy projects. Currently, this includes i.a. onshore and offshore wind power and can also include related research and business development as well as dedicated infrastructure.
