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BKW Green Bond

Reporting on allocation and impact

Dear shareholders,
Dear Sir/Madam,

In 2019, BKW became the first listed Swiss company to issue a Green Bond for trading on the Swiss exchange, thereby enhancing the green bonds offer on the Swiss capital market. I am extraordinarily proud that at the start of 2021, BKW, through Kraftwerke Oberhasli AG, has issued Switzerland’s first green bond for large-scale hydroelectric power and storage and therefore achieves yet another pioneering landmark.

Topics such as climate protection and renewable energy supply have been driving our company for many years, and in 2019 we set ourselves the target of making sure that 75 % of our production capacity would consist of renewables by 2023. The income from the issue has been used accordingly to finance renewable wind and small hydroelectric power plants.

I would like to take this opportunity to provide a short progress report: At the end of 2020, the proportion of renewable production capacity was 74 %. That means that we are 99 % of the way to achieving our target. We’re therefore on track.

In mid-August 2020, BKW commenced construction of the Sousbach hydroelectric plant, which is planned to enter operation in spring 2025 and will generate renewable electricity for 6,700 homes. In total, BKW invested CHF 5.3 million in 2020. Thus, 100 % of the net proceeds has been allocated to green projects.

The wind farms in France were running according to plan. And in Norway, the Harbaksfjellet and Kvenndalsfjellet wind farms came online in 2020 as planned. While the construction of the Geitfjellet wind farm was completed according to plan in August 2020, commissioning was delayed because of Covid-19, so that 10 of the 43 turbines could not enter into operation until the start of 2021. All of the wind farms are now in production.

The 373.9 GWh of electricity produced in 2020 and attributable to the Green Bond corresponds to the annual consumption of 83,000 households 1 in Switzerland. The CO2e emissions saved in the same period amount to 6,180 tonnes or 8,085 tonnes since the launch of the Green Bond. We are pleased to provide you with details below about the allocation of the net proceeds and the impact we have achieved through the projects financed by the Green Bond in 2020.

Best regards,

Ronald Trächsel
CFO

1 Calculation based on consumption of a 5-room apartment of 4,500 kWh per annum, according to https://www.strompreis.elcom.admin.ch/BaseDataSelection.aspx

Reporting on allocation and impact

To ensure the transparency and quality of the green bonds issued, BKW reports annually on the allocation of net proceeds and impact. The following reporting principles have been defined for quality assurance purposes:

BKW Green Bond reporting principles

Installed capacity (MW)

In the case of projects in operation, installed capacity in megawatts (MW) indicates the installed capacity attributable to the Green Bond based on the commissioning documentation. In the case of projects under construction, the capacity shows the planned capacity attributable to the Green Bond based on the manufacturer’s type certificate or the hydroelectric concession.

Production (GWh)

Production in gigawatt hours (GWh) indicates production based on production data (energy statistics) for 2020 attributable to the Green Bond.

Greenhouse gas emissions in CO2e (t) avoided

The Green Bond projects generate renewable electricity in Norway, France and Switzerland. When calculating the emissions avoided, we assume that the electricity generated by the Green Bond projects would otherwise have been generated using the country’s typical production mix.

The emission factors for these production mixes form our baseline accordingly. In contrast to the previous reporting, we now use the latest information from the International Energy Agency (IEA)1 for all countries. The IEA now includes greenhouse gases CH4 (methane) and N2O (nitrous oxide) as well as CO2. The following values are used for the calculations:

Direct emissions for the projects are calculated using treeze 2. These are 0 g CO2e/kWh each for the small hydropower and onshore wind technologies.

The CO2e in tonnes (t) avoided is calculated by multiplying the production quantity of a project attributable to the Green Bond by the CO2e emission factor of the production mix for the country in which the project is located.

Allocation (CHF million)

The allocation in millions of Swiss francs (CHF million) corresponds to the amount of the net proceeds from the Green Bond allocated to the respective technology.

Allocation (%)

The allocation in % corresponds to the share of the net proceeds from the Green Bond allocated to the respective technology.

1 IEA Statistics Data Service: Emissions Factors, 2020 edition, released 11 September 2020

2 treeze Ltd. (Messmer A., Frischknecht R.) (2016): Umweltbilanz Strommix Schweiz 2014

Reporting on allocation and impact

Attributable to the Green Bond …

Comissioning

Installed production

Production 2020

CO2e avoided 2020

Allocation 1

Technology

Project

Country

Status

Year

MW

GWh

t

CHF millions

%

Small hydro

Ragn d’Err 2

Switzerland

Operation

2016

2.3

7.9

206.5

Schattenhalb

2017

1.3

3.4

88.3

Spiggebach

2017

0.8

3.0

79.3

Sousbach

Planning

2025

1.2

0.0

0.0

Subtotal small hydro

5.6

14.3

374.1

25.0

12.5 % 

Wind

Saint Germier

France

Operation

2017

7.1

23.2

1,257.6

St. Julien du Terroux

2017

6.1

12.1

652.3

RAZ Energie 3

2017

13.4

24.3

1,315.6

Roan

Norway

Operation

2018

25.0

91.5

786.8

Marker

2019

40.1

144.5

1,242.9

Hitra II

2019

7.9

25.5

219.4

Harbaks-/ Kvenndalsfjellet 3

2020

22.4

25.4

218.6

Geitfjellet 4

Partial operation

2020/21

17.1

13.1

112.8

Subtotal wind

139.1

359.6

5,806.0

175.0

87.5 % 

Not allocated

0.0

0.0 % 

Total

144.7

373.9

6,180.1

200.0

100.0 % 

Total since issuance

491.2

8,085.0

1 The allocation includes financing of the Sousbach project amounting to CHF 5 million. The remaining CHF 195 million has been used for refinancing.

2 Ragn d’Err: According to the Green Bond Framework, the lookback period of 36 months may be exceeded. The excess must be disclosed transparently. In the case of the Ragn d’Err project, this period was slightly exceeded at 38 months. Due to the project’s long term, the project was refinanced with the Green Bond, despite the overrun being small.

3 Harbaksfjellet/Kvenndalsfjellet: These two projects are directly adjacent and were developed, approved and constructed together. Internal reporting is consolidated for both projects. Accordingly, the Green Bond reporting has also been consolidated for both projects.

4 Geitfjellet: Commissioning was planned for 2020 but was delayed due to Covid-19. 33 turbines were commissioned in 2020 and 10 turbines came online at the start of 2021.

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