Verizon completes final allocation of its fifth $1 billion green bond

Rhea-AI Summary

Verizon Communications Inc. issues its Green Bond Impact Report, allocating nearly $1 billion from its fifth green bond to renewable energy projects. The company aims to achieve net zero emissions by 2035 and has become a leader in green bond issuance in the U.S.

Insights

Financial Analyst

Verizon's commitment to green financing through its fifth green bond issuance is a strategic move that aligns with the growing trend of sustainable investing. The full allocation of nearly $1 billion towards Renewable Energy Purchase Agreements (REPAs) indicates a robust approach to achieving their net-zero emissions goal by 2035. This initiative can potentially enhance Verizon's reputation as a socially responsible investment, which may attract ESG-focused investors and possibly lead to a more favorable cost of capital over time.

From a financial perspective, the investment in renewable energy projects could lead to operational cost savings in the long run due to lower energy prices compared to traditional sources. However, investors should be aware that the upfront capital expenditure for these projects may impact Verizon's short-term financials. The focus on renewable energy also positions Verizon to take advantage of potential tax credits and incentives, which could improve their financial performance in the coming years.

Sustainability Expert

The issuance of green bonds by corporations like Verizon is a critical step in supporting the transition to a low-carbon economy. By allocating these funds to REPAs, Verizon is not only contributing to the development of approximately 0.9 GW of new renewable energy capacity but also influencing the wider market. The company's actions encourage the expansion of renewable energy infrastructure, which is essential for reducing greenhouse gas emissions.

Verizon's leadership in this area, being one of the largest green bond issuers in the U.S., sets a benchmark for other companies in the telecom sector and beyond. It demonstrates the feasibility and business case for large-scale investment in sustainability, which is crucial for catalyzing industry-wide change. The impact of these investments extends beyond environmental benefits, as they can also lead to job creation in the renewable energy sector and support local economies where the projects are located.

Energy Sector Analyst

The allocation of funds from Verizon's green bond to REPAs is a significant development for the energy sector. Renewable energy projects in the states of Illinois, Maine, North Dakota, Ohio and West Virginia are set to receive a substantial influx of capital, which is likely to accelerate the growth of renewable energy infrastructure in these regions. The nearly 0.9 GW of new generating capacity represents a meaningful addition to the United States' renewable energy portfolio.

For the energy market, this move by Verizon could drive down costs for renewable energy technologies due to increased scale and potentially lead to more competitive pricing for end-users. It is also indicative of a broader shift among corporations towards long-term power purchase agreements (PPAs), which provide stability for renewable energy producers and secure low, fixed-rate energy costs for corporate buyers. As more companies follow Verizon's lead, the demand for renewable energy could significantly reshape the energy market's supply and demand dynamics.

NEW YORK, Feb. 19, 2024 (GLOBE NEWSWIRE) -- Today, Verizon Communications Inc. (NYSE, Nasdaq: VZ) issued its Green Bond Impact Report, outlining the full allocation of the nearly $1 billion of net proceeds from its fifth green bond, which was issued in May 2023.

In February 2019, Verizon became the first U.S. telecom company to issue a green bond and remains a leader in the industry with the allocation of five green bonds.

“The $5 billion of green bonds that we have issued to date are instrumental to our efforts to achieve our goal of net zero emissions in our operations by 2035,” said Tony Skiadas, Verizon’s executive vice president and chief financial officer. “As one of the leading corporate buyers of renewable energy and one of the largest green bond issuers in the U.S., we are proud to help accelerate the greening of the U.S. electrical grid as we work to meet our goals around climate protection.”

As of February 16, 2024, Verizon has fully allocated the $994.1 million of net proceeds of our fifth green bond entirely to REPAs for renewable energy projects. The REPAs, including amendments to prior REPAs to make additional investments, were executed between February 2023 and January 2024. The REPAs support renewable energy projects that are under development in five states – Illinois, Maine, North Dakota, Ohio and West Virginia. The REPAs cover nearly 0.9 GW of new renewable energy generating capacity, of which about 53% is solar energy generating capacity and about 47% is wind energy generating capacity.

As part of our renewable energy purchase program, Verizon has entered into 27 REPAs for a total of approximately 3.6 gigawatts (GW) of anticipated renewable energy generating capacity. These REPAs position us to exceed our target to source the equivalent of 50% of our total annual electricity consumption with renewable energy by 2025. We will continue to identify new renewable energy projects under development as we work toward our 2030 renewable energy target of 100%.

Verizon’s renewable energy purchase program supports Citizen Verizon, the company’s responsible business plan for economic, environmental and social advancement. The Green Bond Impact Report can be found on the company’s investor relations site at https://www.verizon.com/about/investors/green-bond-reports.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed in 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $134.0 billion in 2023. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, and security.

VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at verizon.com/news. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.

Media contact:
Andrew Eble
andrew.eble@verizon.com
201.572.0975

FAQ

What is the purpose of Verizon's Green Bond Impact Report?

Verizon's Green Bond Impact Report outlines the allocation of nearly $1 billion from its fifth green bond to renewable energy projects.

When did Verizon issue its first green bond?

Verizon issued its first green bond in February 2019, becoming the first U.S. telecom company to do so.

What is Verizon's goal regarding net zero emissions?

Verizon aims to achieve net zero emissions in its operations by 2035.

In which states are the renewable energy projects supported by Verizon's REPAs located?

The renewable energy projects supported by Verizon's REPAs are located in Illinois, Maine, North Dakota, Ohio, and West Virginia.