Project detail - Acciona Financiacion Filiales S.A.

Who is our prospective customer?

The transaction consists of up to USD 100mln B-loan behind IFC, to participate in an unsecured corporate facility to Acciona Financiación Filiales, S.A. (“AFF”, the “Borrower”), with a tenor of 7 years. The transaction is fully guaranteed by Acciona S.A. (“Acciona” or the “Guarantor”), rated BBB (low) stable by DBRS Morningstar (2024). Acciona is a large Spanish corporate (listed in the IBEX 35 index; EUR 6.5bn market capitalization) and has maintained its investment grade rating for the past 10+ years. AFF is a financial holding company based in Spain that was set up to raise financing and provide funding to sub-holdings of the Group.

What is our funding objective?

The total financing of the project is estimated at USD 600mln. FMO is participating as a B-lender under the IFC facility in Tranche 1 of the transaction with an amount of up to USD 100mln. The financing proceeds in Tranche 1 will be used to finance three power transmission projects in Peru (increasing the capacity of existing transmission lines, building new transmission line capacity, and building new substations) and includes the expansion of metro line 6 in Sao Paolo, Brazil.

Why do we want to fund this investment?

The three projects in Peru will contribute to decarbonizing the country’s energy mix by increasing the penetration of renewables in the Country, which is still heavily reliant on fossil fuels (38% of electricity production in 2021). One of the projects is in southern Peru - a region with strong renewable resources but is experiencing curtailment. The other two projects are in the north – a low-income, isolated region that still relies on diesel for grid stability. The transmission lines will allow an increased flow of energy in the Peru-Ecuador interconnection system. As such, the transaction fits well with the transmission & distribution strategy by increasing FMO’s investments in the electricity transmission sector. The expansion of metro line 6 in Sao Paulo, Brazil, will help to decarbonize the country and will connect low-income suburbs of Brasilandia and Freguesia do O with the city center, including key public services such as universities and hospitals. The project is expected to transport >600,000 passengers daily and reduce current commute times by 1.5+ hours.

What is the Environmental and Social categorization rationale?

Under the A/B syndicated loan structure, the Arranger (IFC) acts as the lender of record vis-à-vis the customer and is responsible for leading the ESG approach and for conducting E&S due diligence. FMO accepts the transaction based on our assessment of the Arranger’s due diligence and ability to meet their processes and requirements. Per FMO’s Sustainability Policy, the E&S category for this project is classified as A. Please consult IFC’s disclosure page for additional investment and E&S information (https://disclosures.ifc.org/project-detail/ESRS/49690/acciona-sll). Note: This transaction will be signed 11 days prior to the lapse of the 60-day disclosure period required by the FMO Customer Disclosure Policy. This deviation was necessary to align with the disclosure timeline of IFC, the A-lender. IFC did ex-ante disclose the transaction for 60 days. We invite stakeholders to submit feedback before 16 December 2024 at disclosure@fmo.nl.