ACS green bond to fund desal on three continents

Published April 5th, 2018

Spanish construction giant Grupo ACS will hold a series of roadshows next week ahead of its inaugural €750 million green bond, and has already secured a top-quartile score after a deep-dive evaluation by S&P Global Ratings.

Although the bulk of the proceeds are earmarked for renewable energy projects, around 12% is destined to be used for water projects, including seawater desalination projects in the UAE, Peru and Africa (€63 million combined).

Desalination has always been a hard sell for green bond investors due to its energy-intensive nature, which appears to go against the core notion of environmental sustainability, as enshrined in ICMA’s Green Bond Principles.

Nevertheless, S&P noted in its evaluation report that the desal projects in question “provide marginal system enhancements in high water stress regions”, although it assigned them the lowest environmental impact score of any ACS project to be financed using the green bond’s proceeds, at 55/100.