STEDIN GREEN BOND (GBPP)

Purchase by the EIB of Green Bond instruments issued by Stedin under its Green Finance Framework, the proceeds of which will finance EIB eligible projects. The Green Bond purchase will target investments in the promoter's electricity distribution network.

The operation will support new eligible projects in the Netherlands, through investment in the promoter's future green bond issuances. The investments will target electricity distribution, focusing on Medium Voltage (MV) and Low Voltage (LV) networks and automation. They will include customer-driven projects?such as new connections for Renewable Energy Sources (RES), Electric Vehicle (EV) chargers, and residential and commercial customers?capacity-enhancing measures like network expansion, and initiatives to maintain quality of supply through asset replacement and modernisation.

The project is in line with the InvestEU objective of the development of the energy sector in accordance with the European Union priorities in particular through the development, smartening and modernisation of sustainable energy infrastructure.

The project helps fill the growing investment gap in European electricity grid infrastructure, which is needed to support the European Energy Transition, as identified, among others, in the EU Clean Industrial Deal, the EU Affordable Energy Action Plan, and the EU Grid Action Plan.

The green hybrid or senior bonds will finance electricity distribution network investments in the Netherlands, thereby contributing to the Netherlands' Long-Term Climate 2050 Strategy set out in the National Energy and Climate Plan (NECP), as well as EU policies on energy and climate, including the REPowerEU action plan, by enhancing critical infrastructure for decarbonisation.

The project addresses negative climate and environmental externalities and contributes to the provision of public goods such as security of supply. This financing contributes to the Bank's lending priority objectives on energy and is deemed to have very high contribution to Climate Action (climate change mitigation).

The project's overall economic viability is expected to be good and the broader social benefit is expected to be rated as very good. The promoter is an experienced operator of electricity distribution networks and has the necessary capacity to manage the implementation and operation of the underlying project schemes.

EIB's involvement with a significant investment, enabled through InvestEU for the hybrid bonds issuances, in the promoter's green bond issuance process is expected to expand its green investor base, diversify its funding sources and contribute to successful market access. Strong InvestEU additionality is achieved through hybrid bonds' high-risk profile and features such as deep subordination, perpetual maturity and flexible terms. Overall, the operation will have a strong crowding-in effect by supporting the promoter in attracting long term financing from public debt markets for its ambitious green investments. Regarding green hybrid bonds, the financing would not have been carried out (to the same extent) by the EIB without the InvestEU support.

Some schemes covered by the operation may fall under Annex II of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, which requires the competent national authority to determine the need for an EIA. Where, and if applicable, the requirements of Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be verified during appraisal. The promoter will need to comply with sustainability-related disclosure requirements under national and EU legislation, which is applicable to its activities, e.g. publication of EIAs. If EIAs of the underlying schemes are not published by the competent authorities, the promoter will need to ensure the EIAs are made public, to ensure compliance with the Bank's Transparency Policy. In any case, the promoter will need to keep the EIAs on file and ensure that the environmental permit requirements are adequately implemented. Environmental and social due diligence will focus on the capacity of the promoter to identify, assess, manage and monitor environmental, climate and social effects, and to ensure that underlying schemes comply with national and EU legislation, as applicable, and with EIB Environmental and Social Standards (ESS) and relevant guidelines. This due diligence will be based on public and non-public information.

The Bank will require the promoter to ensure that contracts for implementation of the project are tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.