Global energy giant Iberdrola has successfully raised €400 million through a new green bond offering, structured uniquely to be linked to the company’s share price. This innovative financing model allows investors to benefit from Iberdrola’s market performance while supporting sustainable energy projects.

A Unique Investment Structure

The 5-year bonds are indexed to Iberdrola’s share price via a call option, which investors can exercise in the three months before maturity. To prevent dilution for existing shareholders, the option can only be exercised through cash settlement rather than new share issuance. Iberdrola will also acquire an identical hedging option to balance the transaction, ensuring financial stability.

The company emphasized that this structure provides cost advantages compared to traditional financing while eliminating unnecessary risk. The coupon rate on the bonds has been set at 1.5%.

Expanding Green Finance Leadership

As one of the largest corporate issuers of green bonds, Iberdrola continues using these financial tools to fund renewable energy, clean transportation, energy efficiency, and waste management projects. The company has been expanding its sustainable financing initiatives, with nearly 94% of its financing in 2024 classified as sustainable.

By the end of 2024, Iberdrola’s total sustainable financing had exceeded €60 billion, including:

€22.9 billion in green bonds
€15.6 billion in sustainable credit lines
€6 billion in sustainable commercial paper
Green and sustainable bank loans & structured finance

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Massive Electrification Investment Plan

Iberdrola has also unveiled an ambitious €41 billion investment program for 2024-2026, focusing on network expansion and renewable energy. Around 60% of the funds will be allocated to distribution and transmission networks, while over 40% will fuel renewable energy growth in the U.S.

As Iberdrola increases its share of green and sustainable debt, its innovative financing strategies are positioning it as a leader in global electrification and clean energy transitions.

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