LONDON (S&P Global Ratings) July 10, 2017—Three Gorges Finance II today received a score of E1/83 on S&P Global Ratings' new Green Evaluation scale for its €650 million green bond issuance due June 2024. The bonds will be used to finance European wind projects acquired by China Three Gorges Corp., the largest hydropower enterprise in the world. This is the first-ever Chinese green bond to be ranked under the Green Evaluation framework, which assesses financing on a scale of E1 (highest) to E4 (lowest). The full Green Evaluation report, titled "Three Gorges Finance II(Cayman Islands) Limited" is available to read on the S&P Global Ratings Green Evaluations web page at http://www.spratings.com/greenevaluation.

"The strong Green Evaluation score reflects robust scores in both Transaction Transparency(67) and Governance (73), together with an excellent Mitigation score of 91," said Michael Wilkins, Analytical Coordinator and Global Head of Climate and Environmental Risk at S&P Global Ratings. “China Three Gorges Corp. has stated its commitment to report annually on both the allocation of proceeds and the environmental impact, a positive factor in our assessment of the transaction’s transparency and governance. However, the Transparency score is hindered slightly by a lack of clarity about the environmental impact metrics it will disclose,” added Mr. Wilkins.

The proceeds from the €650 million issuance evaluated in this report will be allocated to wind power projects in Germany and Portugal, totaling 710 MW of installed capacity. This is in line with China Three Gorges Corp.’s corporate strategy to acquire assets in China and further afield that will grow and diversify its renewable energy business. 

The Portuguese assets consist of 12 onshore wind projects in five regions across Portugal. The assets are fully operational, have an average age of six years, and total 422 MW of installed capacity. 

The other asset to which proceeds will be allocated is WindMW GmbH (or also referred to as Meerwind),an offshore wind project in the North Sea off the coast of northern Germany. The project has been operational since February 2015 and has a total installed capacity of 288 MW. In 2016, it produced 1,155 GWh of electricity and sold 1,134 GWh. Germany has supportive policies for offshore wind and renewables, largely due to the Energiewende (energy transition), which received legislative support in 2010 and aims to achieve a target of 60% renewable energy sources in final energy consumption by 2050. 

S&P Global Ratings Green Evaluations are not credit ratings. A Green Evaluation is an asset-level environmental credential which builds upon today’s existing frameworks of governance and transparency (e.g. Green Bond Principles) and considers approaches for climate resilience and environmental impact. These analyses aim to provide investors with a more comprehensive picture of the green impact and climate risk attributes of their portfolios and can be applied to any type of financing, in part or in full.

Media Contact: Ola Fadahunsi, New York (212) 438-5095
[email protected]

Analyst Contact: Jessica Williams, London (44) 2017 176 3884
[email protected]

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