CUC secures “green” funding

Cayman’s sole energy provider, CUC, has just secured US$80 million of funding through the issuing of  US$40 million 6.17% Senior Unsecured Green Notes due May 15, 2039, US$10 million 6.37% Senior Unsecured Green Notes due May 15, 2049, and US$30 million 6.37% Senior Unsecured Notes due May 15, 2049.

The debt offering was privately placed with institutional investors with CIBC acting as sole placement agent and sole green structuring agent. Proceeds from the offering will be used to repay short-term indebtedness, and to finance ongoing additions and upgrades to CUC’s generation, transmission, and distribution systems, the company said.

This marks CUC’s inaugural release of notes under its Green Financing Framework established last month, and is also the first time that green bonds have been issued by a corporate entity in the Cayman Islands to date.

CUC said it would dedicate $50 million of the net proceeds from the sale of the notes towards the funding or refinancing of new and/or current qualifying green initiatives, in accordance with the standards outlined in the Framework.

The Framework has been developed in conjunction with the Green Bond Principles issued by International Capital Markets Association and Green Loan Principles issued by the Loan Market Association, the Loans Syndications and Trading Association and the Asia Pacific Loan Market Association, CUC advised.

Proceeds from transactions under the Framework can be allocated to four categories: renewable energy; energy efficiency; climate change adaptation; and clean transportation. These categories are deemed to be in alignment with CUC’s sustainability strategy and the Cayman Islands’ National Energy Policy.

President and Chief Executive Officer, Richard Hew said they were pleased to secure this long-term financing on favourable terms, a reflection of the continued sustainability and strong credit ratings of the Company and the jurisdiction.

“At CUC, we recognise the crucial role of environmental responsibility, transparency, and accountability in fostering sustainable development,” he stated. “Hence, we are delighted to meet energy demands and climate parameters through the establishment of CUC’s inaugural green financing framework to refinance and finance eligible projects that will enhance the sustainability of investment opportunities, prioritising projects with positive environmental impacts. We aim to propel measurable environmental impacts by financing projects that contribute to carbon reduction, energy efficiency, climate adaptation, and clean transportation.”