Cadent launches the first ever UK transition bond

BNP Paribas' sustainable finance teams supported gas distribution network provider Cadent in the launching of the UK's first ever transition bond.

Decarbonising the economy towards a 1.5°C pathway [1] requires a collective effort from the financial industry, with the Intergovernmental Panel on Climate Change (IPCC) estimating that annual average investments in low-carbon energy technologies and energy efficiency must be upscaled by roughly a factor of six by 2050 compared to 2015. Transition bonds help carbon-intensive issuers’ shift to the green economy by supporting decarbonisation pathways to reduce their emissions via ambitious strategies that accelerate the energy transition.

Transition bonds help carbon-intensive issuers’ shift to the green economy by supporting decarbonisation pathways to reduce their emissions through ambitious strategies that accelerate the energy transition.


In June 2019, the British Government passed legislation committing the UK to net zero greenhouse gas emissions by 2050. As Cadent is the largest gas distribution network in the UK, supplying gas to 11 million homes and businesses across the country, supporting the energy transition has become a core driver of its financing strategy. To shape the future of the energy system through its network, Cadent collaborated with BNP Paribas’ sustainable finance experts to create a transition bond framework, presenting an ambitious pathway to decarbonisation. This culminated in Cadent issuing the UK’s first ever transition bond in March 2020, a €500 million 12-year bond aligned to the EU Sustainable Finance Taxonomy and the UK’s National Adaption Plan.

The bond was 8.5x oversubscribed highlighting strong investor appetite to support the energy transition in the UK , the same year as the COP26 summit takes place in Glasgow. Cadent intends to use the proceeds from the issuance of the bond to finance:

  • the retrofitting of gas transmission and distribution networks
  • renewable energy
  • clean transportation
  • energy-efficient buildings

[1] Paris Agreement/Accord signed by countries to keep the increase in the global average temperature to within 1.5°C above pre-industrial levels.

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