Siemens Gamesa pioneers the green foreign exchange hedging market

Siemens Gamesa pioneers the green foreign exchange hedging market
FILE PHOTO A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio Spain June 20 2017 REUTERSVincent WestFile Photo
Published: 30 October 2019 - 6:20 p.m.
By: Baset Asaba

Siemens Gamesa Renewable Energy (SGRE) has arranged sustainable FX hedging contracts, totalling €174 million in a landmark operation coordinated with BNP Paribas. It represents another significant step in the company’s commitment to sustainable development across all of its activities.

These are the first FX hedging deals to be arranged under BNP Paribas's new sustainable derivatives platform linked to the United Nation’s Sustainable Development Goals (SDG), through which Siemens Gamesa has converted a notional total of €174 million in FX hedging deals to 'green' transactions. The derivatives are used not only to hedge the FX exposure of selling offshore wind turbines in Taiwan, they also have an impact on the SDG targets related to ‘Climate Action’, and ‘Affordable and Clean Energy’.

The company continues to record new milestones in its sustainable development strategy, having already raised €1.25 billion in ‘green’ transactions that contribute to the SDG programme.  

Recently, in another deal arranged with BNP Paribas, the company converted a €240 million guaranteed credit line into a ‘green’ line and signed an additional line for €110 million. That €350 million is in addition to the €900 million in guarantees arranged with another bank. 

David Mesonero, CFO at Siemens Gamesa, said: “We are taking the lead in green finance, and proving that sustainability can be present in every step we take as a Company. This operation hedges foreign exchange risk in a key market for us, and contributes to mitigating the effects of climate change at the same time. By walking our talk we´re leading the way for more and more companies.”

Amine Bel Hadj, Global Head of Sustainable Finance for Global Markets at BNP Paribas, said: “This sustainable FX hedge illustrates BNP Paribas’ continued strength as an industry leader in sustainable finance. Our pioneering and innovative structuring capabilities across rates and FX support our clients in the energy transition and help accelerate the UN SDGs. To accompany Siemens Gamesa´s sustainable journey, the bank is providing this hedge of the FX exposure attached to a renewable project, as well as committing to reinvest any premium in a reforestation project.”

Alberto Sarricolea, Head of Corporate Coverage at BNP Paribas Spain added: “Spain is at the forefront of the sustainable trend and BNP Paribas feels proud to continue supporting sustainable champions like Siemens Gamesa with innovative positive impact solutions.”

The FX hedging deals will direct premium payments towards financing Forestry Projects. These Sustainable Initiatives include plantation projects in Spain, which have a forest preservation objective.

Siemens Gamesa Environmental, Social and Governance (ESG) strategy conceives global development to be underpinned by economic growth, social welfare and environmental protection. The company is committed to driving this global process forward and contributing to the achievement of SDGs and related objectives. We create scalable technology solutions for solving global problems and generate benefits while benefiting society as a whole.

With over 95 GW of installed wind capacity, Siemens Gamesa contributes to cutting emissions of CO₂by 247 million tons per year, the equivalent of planting 4 billion trees. The company also supports global climate protection goals and has adopted the global initiative to decarbonise economies. It has committed to be carbon-neutral by 2025, by replacing conventional emission-intensive power sources with renewable energies in its operations.

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