Telefónica issues telecom sector's first 'green bond'

Spain-based Telefónica is laying claim to being the first company in the telecommunications sector to issue green bonds.

Telefónica announced on Monday that the green bonds had raised €1 billion ($1.14 billion) over a five-year term and that the bonds were more than five times oversubscribed. The green bonds were also the first bonds of any sort that Telefónica has issued this year.

The proceeds from green bonds, which are a relatively new segment of the bond market, are typically used to fund environmentally friendly projects

Telefónica said the proceeds of the green bond sales, with almost 50% being bought by green investors, would be used to "finance projects devoted to increasing the company's energy efficiency thanks to the network transformation from copper to fiber optic in Spain." The funds will be used in existing projects that are no more than three years old and in future projects.

Telefónica said that its fiber-to-the-home (FTTH) deployments were 85% more efficient than copper networks.

FTTH also increases bandwidth to Telefónica's residential customers and provides a fat pipe for the delivery of new services and applications. While FTTH deployments have typically taken place in greenfield build-outs, service providers of all stripes are replacing copper and HFC with fiber.

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With its FTTH deployments, Telefónica said it has saved 208 Gigawatt hours over the past three years, which means avoiding the emission into the atmosphere of 56,500 tons of CO2, equivalent to the carbon captured by more than 900,000 trees.

The fiber deployments also allow Telefónica to close a copper central office daily, recycling all the material as part of its commitment to a circular economy, the company said.

The green bonds and fiber deployments are elements of Telefónica's renewable energy and energy efficiency initiatives. Earlier this month, Telefónica was recognized for the fifth-straight year as one of CDP's leading companies for climate change management.

Telefónica is already 100% renewable in Europe and Brazil, and it has set a goal of being renewable in all of the countries it serves by 2030. It reduced its CO2 emissions by 28% in three years, with the commitment to cut them by 30% to 2020 and 50% by 2030, in line with the Paris Agreement.