October 28, 2024

By Gerelyn Terzo, Global AgInvesting Media

While green bonds have already made their mark in the ESG industry, a different type of debt instrument is gaining traction. In a first for France’s water sector, Saur Group has announced the pricing of €550 million (US$594.8 million) in blue bonds, which while modeled after green bonds, specialize in financing projects focused on protecting and restoring the marine environment. Domiciled in Issy-les-Moulineaux, a town outside of Paris, Saur operates across nearly two dozen countries, delivering drinking water, purifying wastewater and building water management infrastructure.

Through the proceeds, Saur plans to support initiatives involving the production and distribution of water, collection and treatment wastewater, and the desalination of water through technologies designed to minimize environmental impacts. Saur Group is out front in the water transition, a movement aimed at transforming the way water is used by reducing consumption and valorizing wastewater. The company further outlined ways in which it will direct the funds, including a refinancing of existing debts as well as financing and refinancing eligible blue projects committed to the protection of water
resources.

In 2023, blue bond issuance soared by 163 percent, catapulting the market size to almost $6.4 billion compared with roughly $2.5 billion in 2022, according to Climate Bonds Initiative data cited by Barron’s. The combined value of green, social, sustainable and sustainability-linked bonds hovered at $5.5 billion as of year-end 2023. A bond’s label is necessary so investors can select the way in which they’d like to see their capital used.

Nuveen Portfolio Manager Steve Liberatore told Barron’s, “As we evolve this market, what’s occurring is not only are we getting the deeper and broader market, we’re getting a more granular market.” This means investors have an opportunity to drill down on the causes that are important to them, including the ocean economy. Liberatore also acknowledged that investors are increasingly being drawn to bonds specifically targeting environmental outcomes.

With revenue of €2.1 billion as of 2023, Saur is targeting revenue of €4 billion by 2030 through innovation and sustainable solutions. The company said the blue bond issuance is aligned with its long-term strategy and expects it will enhance its ability to attract future funding for projects with significant environmental impact.

Saur Group Executive Chairman Patrick Blethon stated, “By becoming the first issuer of blue bonds in the water sector, Saur affirms its leadership and visionary commitment to more sustainable water resource management. This operation sends a clear message to our partners and investors: at Saur, innovation and environmental responsibility are the drivers of our growth.”

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