Supporting the green transition with innovative electric vehicle batteries & accelerator products

29/06/2020

In May, BASF issued the first green bond in the European chemicals sector with the help of Societe Generale. Proceeds will be used for several green projects, including the production of electric vehicle batteries and accelerator products.

There’s little doubt nowadays that electric vehicles are one part of the future of automotive transportation. Powerful batteries are indispensable when it comes to making the sustainable future happen. With its innovations in electric car battery materials, BASF aims to double the driving range of midsize cars from 300 to 600 km on a single charge, decrease the size of batteries and expand their lifesize.* A significant portion of the proceeds from the green bond placed in May 2020 will be used for the development, manufacturing and acquisition of low carbon transportation components, thus helping make a transition to a more sustainable future possible.

Another important pillar that will be supported by the landmark green bond issue are Accelerator Products (see link for examples). Accelerators are solutions that make a substantial sustainability contribution in the value chain across product and industry categories. The company has identified over 12,000 solutions and  wants to considerably increase the sales to €22 billion by 2025 (2019: €15 billion). This target reflects a strong commitment to further drive innovation beyond today’s state of the art.

We are pleased with the successful placement and with the strong support we received from Societe Generale. The high demand from investors for this bond underscores the capital market’s confidence in our solid financial policies and our sustainability-driven corporate strategy. The initial issue of a green bond now firmly anchors sustainability in BASF’s financing strategy as well.

Dr. Dirk Elvermann
President Corporate Finance, BASF

BASF’s newly established Green Finance Framework not only allows to use the proceeds from the green bond to be used for accelerator products and electric vehicle battery materials, however, but also to finance or refinance several other green projects. These include the planning, construction, development and installation of renewable energy production and storage units. Projects in the field of carbon management (reducing CO2-emissions) and chemical recycling will profit from the bond issue as well.

The transaction further underlines the capabilities of the bank in supporting its clients on projects with a strong sustainable and positive impact and underlines Societe Generale’s commitment towards a responsible and sustainable future by providing capital markets financial solutions in that field.

Martin Wagenknecht
Head of Debt Capital Markets Germany & Austria, Societe Generale

Societe Generale acted as a Joint Bookrunner on this, BASF’s inaugural green bond transaction and the overall first green bond in the European chemicals sector.

The transaction was preceded by a digital investor roadshow and was subsequently met with great interest and proved a huge success, both in terms of size and price. The projects that are set to profit from the transaction contribute to a number of UN Sustainable Development Goals, namely goals number 2, 3, 6, 7, 8, 9, 11, 12, 13, 15. The full list of UN sustainable goals is available under: https://www.un.org/sustainabledevelopment/sustainable-development-goals/

This deal serves as a testimony of the very strong current relationship between BASF and Societe Generale, as illustrated last year by Societe Generale's active role in the Wintershall-DEA merger transaction and this year’s €3bn short-term liquidity line to face the Covid-19 exceptional situation. Senior Banker, Societe Generale

Ralph Neher
Senior Banker, Societe Generale
No author id set