A2A Issues First Green Bond Under EU’s New Gold Standard

Italian utility company A2A has raised €500 million (USD$521 million) in a green bond issuance, marking the first corporate bond issued under the EU’s new European Green Bond (EuGB) label. This regulation, adopted by the EU in November 2023 and effective as of January 2025, aims to set a “gold standard” for green bonds to combat greenwashing and advance sustainable finance within the EU.

The EuGB regulation mandates that all proceeds from bonds issued under this designation be invested in activities aligned with the EU Taxonomy. A flexibility provision allows up to 15% of proceeds to be allocated to economic activities that comply with taxonomy requirements but are in sectors lacking established criteria, with issuers required to disclose allocation details.

Beyond investment requirements, EuGB-designated bonds must meet strict transparency criteria. Issuers must disclose the intended use of proceeds, commit to a green transition plan, and report on how investments contribute to these sustainability goals.

A2A’s issuance outlines four eligible categories for fund allocation: renewable energy, energy efficiency, transmission and distribution networks, and pollution prevention and control. Projects supported by the bond include solar PV, wind power, hydropower, energy storage, grid upgrades for renewable energy integration, and waste collection initiatives.

The bond saw strong demand, with orders reaching €2.2 billion, nearly 4.4 times oversubscribed.

Luca Moroni, CFO of A2A, commented: “This issuance confirms A2A’s position as a reference institution in the development of sustainable finance instruments. This new product, together with the ESG instruments already adopted by the Group, supports the path towards ecological transition through investments aligned with the European Taxonomy, as detailed in the Strategic Plan.”