Financing and Advisory
One of the ways we are serving the needs of our clients while playing a critical role in the transition to a lower carbon energy future is through our commitment to supporting clean energy.
Since the inception of the Environmental Policy Framework in November 2005, we have financed nearly $37 billion towards clean technology companies globally.
In 2012, we extended our long standing commitment by establishing a $40 billion target to finance and invest in companies that promote clean technology alternatives over the next decade. Over the past two years, we made significant progress towards meeting this goal with nearly $13 billion in financing for our clients. We also served as financial advisor on clean energy mergers & acquisitions transactions valued at more than $1 billion. In recognition of our leadership, Bloomberg New Energy Finance ranked Goldman Sachs first in public market transactions for 2013 for the clean energy and energy smart technologies sector.
With a dedicated Clean Technology and Renewables Investment Banking Group, we are committed to meeting the different capital and strategic advisory needs of our clients in the sector.
Advanced biofuels and renewable oils: We continue to strengthen our relationship with Solazyme, a global market leader in the design and production of advanced biofuels and renewable oils and bioproducts. In January 2013, we served as sole underwriter on the company’s $125 million convertible debt offering. Proceeds of the transaction will be used to fund the company’s growth objectives. This was the second transaction we have worked on with the company. We served as a bookrunner on their initial public offering in 2011.
Electric vehicles: In February 2014, we managed a $2 billion convertible notes offering for Tesla, a manufacturer of high-performance, fully electric vehicles and advanced electric vehicle powertrain components. The offering was significantly oversubscribed and represented the largest convertible debt transaction since 2010. In May 2013, we helped raise over $1 billion in new financing for the company, which enabled Tesla to repay the entire loan that it had received from the U.S. Department of Energy in 2010, nine years earlier than it was due. This was the sixth equity or equity linked offering we have led for the company, including acting as an underwriter for them on their initial public offering in 2010.
Smart Grid: In March 2013, we served as lead-left bookrunner on the $93 million initial public offering for Silver Spring Networks. Silver Spring Networks provides a leading networking platform and other solutions that enable utilities to transform a power grid infrastructure into a smart grid. Its technology connects millions of devices that generate, control, monitor and consume power. These networks provide a wealth of data that enables utilities to enhance efficiency, increase reliability and automate manual services, including meter reading. They also enable households to monitor their own energy use and make adjustments, if needed, during times of expensive peak demand. The oversubscription of the offering suggests investors’ deep interest in market leaders focused on the modernization of electrical grids.
Demand Side Management: In April 2014, we served as joint active bookrunner for Opower, a leading provider of cloud-based software to the utility industry, in the announced pricing of its Initial Public Offering of $133mm. Opower combines a cloud-based platform, big data, and behavioral science to help utilities around the world reduce energy consumption and improve their relationship with their customers.
Wind: In August 2013, we assisted China Longyuan Power Group, the leading wind power operator in Asia and second largest globally, to successfully issue a three-year, 3.25 percent $300 million bond. The proceeds of the transaction will be used to develop and expand the company’s renewable energy businesses as well as for working capital and general corporate purposes. China Longyuan Power is playing an important role in China’s endeavor to diversify its energy mix and meet its growing energy needs by expanding renewable energy.
Extreme weather events, such as Hurricane Sandy and drought conditions affecting more than half the continental United States, highlight the urgency for long-term planning for more resilient infrastructure. Compounding these challenges is the aging water and wastewater infrastructure system, which, according to the U.S. Environmental Protection Agency, will require $633 billion in capital improvements over the next two decades to maintain current levels of service. Increasingly constrained government funding has made meeting the infrastructure needs more challenging. We have continued to play a meaningful role in identifying new sources of capital and financing innovated solutions to address these critical infrastructure needs. In July 2013, Goldman Sachs acted as sole bookrunner in the issuance of $308 million of Lehigh County Authority Water and Sewer Revenue bonds (City of Allentown Concession). The bonds were issued to finance the upfront payment required to lease the water and sewer system from the City of Allentown, Pennsylvania, and prefund the system’s five-year Capital Improvement Program. As consideration for the upfront payment, the city granted a 50-year concession allowing Lehigh County Authority to operate the system. This innovative transaction resulted in a more regionally managed water system for Lehigh County.
Increasing interest from investors has created opportunities for environmentally beneficial projects to raise capital in the fixed-income markets. Green bonds are debt financings in which proceeds are exclusively directed towards green purposes. In February 2014, we acted as joint bookrunner on Unibail-Rodamco’s €750 million green bond issuance. Unibail-Rodamco is a pan European commercial property operator, investor and developer. Proceeds will be used to finance the construction and development of new and existing eligible assets, as certified by BREEAM --- a leading global design and assessment method for sustainable buildings. This transaction marks the first green bond issued by a corporation in 2014 and the first ever for a real estate company in the Euro market. In April 2014, we served as joint bookrunner on Iberdrola’s €750m green bond, the first of its kind in Iberia. The proceeds of the issuance will be used to finance and refinance new and existing green projects which were initially financed by existing bond issuers that are part of a separate tender offer.
The Green Bond Principles, a voluntary set of guidelines on the issuance of green bonds, were released in January 2014. These Green Bond Principles suggest a process for designating, disclosing, managing and reporting on the proceeds of a Green Bond. A consortium of 13 investment banks, including Goldman Sachs, at the time announced their support for the Green Bond Principles
This document is posted to GS.com for information only and is not for redistribution. This document has been prepared by the Environmental Markets Group at Goldman Sachs and is not a product of the research department of Goldman Sachs. This document should not be used as a basis for trading in the securities or loans of the companies named herein or for any other investment decision. This document does not constitute an offer to sell the securities or loans of the companies named herein or a solicitation of proxies or votes and should not be construed as consisting of investment advice.