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Société des grands projets issues €1 billion with its new green framework aligned with EU Taxonomy Climate objectives

On February 10th, 2024, The Société des grands projets (formerly known as Société du Grand Paris) successfully issued a EUR 1 billion Green Bond, marking the launch of its new Green Financing Framework[1] fully aligned with two of the six EU Taxonomy environmental objectives. Natixis acted as sole sustainability structuring advisor for the update of the framework and joint bookrunner of the transaction.

Inaugural Green Bond Transaction review

Since 2018, SGP has been positioning itself as a reference issuer by offering to investors liquid, 100% Green, long-dated securities. With an outstanding green debt of 29.7bn€, an average maturity of 22 years and 1.1% of average yield, SGP is one of the top green bond issuer worldwide, and its program shapes and inspires the whole market. 

After holding a non-deal roadshow to introduce its new name and green framework structured by Natixis, the Société des grands projets pre-announced the mandate for its first 25-year benchmark on Monday February 5th which immediately sparked a strong market reaction with positive indications of interest.

Books officially opened the next morning on the back of a supportive market backdrop alongside with competitive supply on the long end of the curve in the € SSA space. Guidance was announced at OAT+42 bps area at 8:49 CET.

Investors participation was very quick and after approximatively an hour and a half, the orderbook was above € 13bn allowing the issuer to revise the initial guidance. After the spread was eventually, investors’ demand continued to flow in and the orderbook closed in excess of €16bn, reaching the largest orderbook ever achieved by the issuer (under its previous name) in the primary market.

For its debut issuance, Société des grands projets managed to attract an historically high interest from an international investor base, proving that the market is supporting SGP’s new national mandate.

This augmented framework and the first issuance made set a precedent in terms of taxonomy aligned green bond, thanks to the granularity of the demonstration, the reporting commitments, and the unique issuer profile of Société des grands projets (long-maturity).

Société des grands projets: An infrastructure agency focused on the Grand Paris Express

Société du Grand Paris, a 100% state-owned public entity established in 2010, is responsible for the design, financing, and construction of the Grand Paris Express (GPE), a new metro network in the Paris area. The Société du Grand Paris became the Société des grands projets in 2023 in accordance with the law of 27th December 2023 on metropolitan regional express services (SERM)[2].

The Grand Paris Express was thought up by policymakers as an urban, social and environmentally sustainable development project for the capital region. It plays a key role in the country’s France 2030 vision and in putting into practice its national low-carbon strategy since transportation accounts for such a large share of greenhouse gas (GHG) emissions and the Île-de-France region is so predominant on a national level. A modal shift is just one of the effects of the Grand Paris Express project; other effects include a reshaping of the urban landscape and the benefits of urban densification.

The benefits generated by the Grand Paris Express are resolutely linked to the decarbonisation of mobility and transportation but actually go even further as this is also an urban planning and regional development project, with significant social co-benefits.

Figure 1: The Grand Paris Express Network

Source : Société des grands projets

The Grand Paris Express network will serve towns in the inner and outer suburbs of Paris with its four new metro lines and 68 stations dotted around the city, as well as its extensions of existing lines, corresponding to a total of 200 kilometres of new rail tracks.

It will offer a faster and low-carbon mobility solution to almost three million passengers each day, bringing the residents of Île-de-France closer to the region’s jobs, educational institutions, healthcare facilities and recreational amenities.

Figure 2: The Grand Paris Express in figures

Source : Société des grands projets

By the end of 2023, 101.5km of rail track had already been bored since the project began out of a planned total of 200 km. On the financial front, meanwhile, 26.2 billion euros of green bonds have been issued since 2018.

Figure 3: Gradual roll-out of the project

Source : Société des grands projets

An updated and enriched Green Bond Programme’s framework

This updated framework is the second revision following the in 2021 version and seeks to offer investors more transparency, perspective, and information. From August 2023 to January 2024, Natixis CIB assisted Société des grands projets (SGP) in the overhaul of its green financing framework. The key innovation of the aforementioned framework update consists in the demonstration of a complete alignment of the single eligible asset with the EU Taxonomy.

A granular and thorough assessment was performed throughout workshops with SGP’s various departments beyond the funding team. A key feature is thetwo-fold eligibility of this framework, not only to climate change mitigation, but also to climate change adaptation.

Subsequently, SGP and Natixis CIB meticulously mapped all the criteria outlined in the Taxonomy to identify the relevant information required to demonstrate the full alignment with the Substantial Contribution, Do No Significant Harm, and Minimum Social Safeguards criteria of the Grand Paris Express.

Substantial Contributions to Climate Change Mitigation

Climate change mitigation is at the heart of the Grand Paris Express project in a region that accounts for 10% of the country's greenhouse gas emissions, 31% of which being due to road transport. The reduction in car use thanks to the new metro is estimated at around 2,000 million kilometres travelled on the road network per year. Such impact will be achieved by carrying nearly 3 million passengers a day. In addition to the modal shift, urban densification around station areas will profoundly transform cities. The two effects combined will produce a carbon saving equivalent to the footprint of around 84,000 inhabitants.

Using the CarbOptimum® carbon calculator, a study carried out and reviewed in 2018 estimated that the Grand Paris Express will save 755,000 of CO2eq each year as soon as it is fully up and running. By 2050, the Grand Paris Express network will have helped to reduce greenhouse gas emissions by at least 14.2 million tCO2eq in the Île-de-France region, according to a conservative scenario.

Substantial Contributions to Climate Change Adaptation

In addition, the criterion of adaptation to climate change is met thanks to the efforts made during the design phase of the infrastructure to enable it to cope with the increased risks of flooding, drought or changes in temperature. The regulatory requirements and specifications set out in the Grand Paris Express project’s technical and functional programme demand a high level of resilience to climate events and climate change.

The Société des grands projets commissioned a climate strategy consultancy, Carbone 4, to assess its infrastructure’s sensitivity to the most likely climate events[3] to affect the Île-de-France region. The firm accordingly drew up a climate event map based on an analysis of climate scenarios in order to specify which risks the infrastructure faced.

The study’s scope covered the network’s overhead sections (railway lines, power supply, concrete and metal structures), underground sections and passenger areas (overhead and underground stations). The analysis tends to show that the Grand Paris Express network is robust as regards its ability to continue operating in the climate conditions of the future as projected today. Gradually rising temperatures, in particular, should generally have little direct impact on the Grand Paris Express structures over their lifespan.

No significant harm to the environment

Each "Do No Significant Harm” (DNSH) criteria has been carefully assessed beyond legal requirements including concrete example of their application.

Example of the protection and restoration of the biodiversity of ecosystems

Protection and restoration of the biodiversity of ecosystems is one of the major targets of the SGP’s CSR roadmap, which aims to limit and offset the impact on natural environments of the construction of surface structures (work bases, sections of line, stations, technical centres, etc.).

Of course, SGP complies with French and European regulations on environmental impact assessments, but there is no national methodological framework for measuring the effectiveness of avoidance, reduction, and compensation measures in the matter.

The SGP therefore worked with CDC Biodiversité to develop an innovative and robust methodology for quantifying and comparing potential biodiversity losses and gains, in other words, for measuring the effectiveness of compensation measures.

The aim is to be able to justify the absence of any net loss of biodiversity at the scale of the project.

Figure 4: Summary of GPE DNSH assessment

Source: Société des grands projets

Minimum Social Safeguards

Regarding the Minimum Social Safeguards, a thorough review of the procedures implemented by the Société des grands projets to ensure the alignment with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, etc. has been carefully conducted and is documented in the framework.

The followed approach aimed at addressing the expectations of the financial community regarding DNSH criteria, emphasizing that compliance with French and European regulations must be substantiated rather than merely asserted.

Therefore, for each criterion, detailed insights into SGP's objectives, commitments, due diligence, and results are provided. The information on the taxonomy is spread out through the various sections of the framework, with different lengths and details to enhance investors and readers’ experience.

Meanwhile, the social co-benefits of the eligible asset are plainly documented, showing that green bonds do not overlook social dimensions, for instance in terms of suburban areas connectivity or employment creation.

Furthermore, this exercise received certification from Sustainability Fitch in its SPO[4], confirming the compliance of the use of proceeds with the EU Taxonomy's substantial contribution criteria, do no significant harm criteria, and minimum safeguards for the environmental objectives of climate change mitigation and adaptation.


[1] Source : Grand Paris Express’ Green Financing Framework, January 2024

[2] Source: Law n° 2023-1269 , 27th December 2023 on metropolitan regional express services (in French only).

[3] The projections made for the purposes of this study were taken from the DRIAS portal based on the IPCC’s worst-case scenario RCP 8.5 (+3.2 to 5.4°C in 2100), set out in the IPCC’s fifth assessment report, for 2055 and 208550. The climate data were taken from each of the EURO-CORDEX models (including CNRM, IPSL and other models fromother climate centres)

[4] Source : Société des grands projets, Second-Party Opinion – Green Framework