EDF issues ESG tokenised bond with BNP Paribas Asset Foundry

EDF ENR, a leader in solar energy production on buildings and on canopy structures over parking lots and a wholly owned subsidiary of French power company EDF, has issued a tokenised bond for a solar energy project financing, representing one of the first renewable energy bond tokenisations on the market.

The native digital asset, which was structured, tokenised and distributed by BNP Paribas CIB, was issued on the public Ethereum blockchain using AssetFoundry^TM, the Bank’s digital assets platform. AssetFoundry^TM is fully integrated into the Bank’s systems and business processes to offer scalable digital assets solutions, and covering all elements of tokenisation from legal and compliance, to technology and business processes.

“This trade, based on tokenisation for renewable financing, is the first of its kind, and fully aligned with the Bank’s development plan: “Growth, Technology and Sustainability 2025”, comments  Arnaud Boyer, Chief Digital Officer at BNP Paribas Corporate and Institutional Banking (CIB). “This innovation creates further bridges between issuers and investors, bringing a unique end-to-end ESG financing solution to our clients – from origination to distribution, to custody.”

“EDF ENR, 100%-owned subsidiary of EDF dedicated to rooftop and shadehouse solar plants in France, is pleased to contribute to this unique project financing tokenisation, thanks to the cooperation between EDF and BNP Paribas, says Benjamin Declas, President of EDF ENR. Such an experiment opens new financing opportunities for smaller photovoltaic projects under our sponsorship or sponsored by our clients.”

A new frontier for green financing

Solar-based financing is the leading segment of the energy transition, with several trillions of financing needs in the near future. Almost half of these financing needs will deal with smaller projects, which are currently underserved. Transactions based on tokenised assets have the potential to bridge the size gap between those projects and the scale expected by investors.

Additionally, both the bond term sheet and ESG data are embedded in the token; a strong improvement in terms of verifying investors’ ESG impact.

“Tokenisation will transform ESG-linked financing. It provides transparency, scale, better granularity for smaller amounts, and verifiability of ESG data across the whole value chain”, explains Khoi-Ahn Berger-Luong, Head of BNP Paribas Real Assets. “This could introduce a more efficient financing system to facilitate development of these smaller renewable energy projects offering dynamic bundling opportunities to investors.”

In order to ensure clean energy usage of the blockchain, utility tokens were minted with renewable energy by Exaion, an EDF subsidiary. The transaction also tested token reversibility as the tokenised bond was seamlessly switched back to a traditional bond, a key element for the continuity plan.  

The issuance was performed on Ethereum blockchain, under French law for unlisted securities, with BNP Paribas Securities Services managing the custody aspects of the token. Jones Day provided legal advice.