Project detail - Genneia S.A.

Who is our customer?

Genneia is Argentina’s largest renewable energy platform, operating 1.4 GW of installed capacity, including 946 MW of wind and 490 MW of solar, which represents 21% of the country’s installed renewable capacity. The company has four projects under construction totaling 349 MW, including the San Rafael, San Juan Sur, Lincoln, and Junin solar PV plants, and is preparing to launch its first Battery Energy Storage System (BESS) project in Buenos Aires. Genneia aims to surpass 2 GW of installed capacity by 2026, reinforcing its leadership in the sector, once all current projects under construction reach COD.

What is our funding objective?

FMO has committed USD 60 mln as a DFI investor in Genneia S.A.’s latest USD 400 mln Global Green Bond, which is due in 2033. This commitment is alongside Proparco, which contributed USD 30 mln. This landmark transaction strengthens Genneia’s position as Argentina’s leading renewable energy company and underscores the growing role of the two European DFIs in supporting the country’s energy transition. The bond, issued at a 7.75% coupon and listed on BYMA’s Green Bond Panel, will amortize over three equal annual installments between 2031 and 2033, with a weighted-average life of 7 years. Proceeds will refinance existing debt, including Genneia’s 2027 Global Green Bond, and free up cash flow for new renewable energy projects.

Why do we fund this investment?

FMO’s participation in the Green Bond issuance not only supports the transition to a low-carbon economy but also promotes gender equality by investing in a gender-smart counterparty. The entire financing (USD 60 million) is classified as Green Finance, as it contributes to climate mitigation and other environmental objectives, and simultaneously as Reducing Inequalities, given its support for a gender-smart counterparty. The investment also qualifies for the 2X Challenge, based on Genneia’s commitments to strengthening its gender-inclusive practices.

What is the Environmental and Social categorization rationale?

The investment has been categorized as A. All IFC Performance Standards (PSs) could potentially apply, as specific investments under the Green Bond in the renewable energy sector are not yet defined. Historically, Genneia's FMO-financed projects have not triggered PS7 and PS8. The Green Bond Framework aligns with the Green Bond Principles 2021 and Green Loan Principles 2023 and is consistent with EU Taxonomy principles. Genneia has an Environmental and Social Management System (ESMS) and an E&S Management Plan that partially align with the IFC PSs. An Environmental and Social Action Plan (ESAP) to address gaps has been agreed upon. The ESAP includes improvements in the project siting decision-making process and strategies for biodiversity management. Due diligence has focused on Genneia's capacity to manage IFC PS risks, supported by FMO and an Independent Environmental and Social Advisor. While Genneia has demonstrated good performance in FMO projects, it requires more systematic implementation of IFC PSs at the corporate level. This transaction provides an opportunity to enhance Genneia's alignment with the IFC PSs in its renewable energy efforts.

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2/16/2023	USD 45.00 MLN