Spanish energy giant Iberdrola has successfully issued its first EU Green Hybrid Bond, raising €1 billion after attracting overwhelming investor demand, underscoring both the company’s financial strength and the growing appetite for sustainable finance.
Record Investor Demand
Iberdrola announced on 29 October 2025 that it had placed a €1 billion green hybrid bond, becoming the first company to align this type of instrument with the European Union Green Bond Standard (EUGBS). The issuance was met with exceptional interest, drawing over €8 billion in orders — an oversubscription of eight times the final offering. More than 400 institutional investors participated, with 87% aligned with UN Principles for Responsible Investment (PRI), reflecting the strong momentum behind sustainable capital markets Iberdrola Energy Live News.
Bond Terms and Market Significance
The hybrid bond carries a 3.75% coupon, the lowest for such an instrument since March 2022, highlighting investor confidence in Iberdrola’s credit profile and green strategy. The bond is perpetual, with a repurchase option beginning in August 2031, and was coordinated by a syndicate of nine international banks, including Barclays and Deutsche Bank Energy Live News chemxplore.com.
Proceeds will be used to refinance a hybrid bond maturing in early 2026 and to fund projects aligned with Iberdrola’s green financing framework, including renewable energy, smart grids, and clean transport infrastructure.
Strategic Context
Iberdrola, one of the world’s largest renewable energy companies, has been a pioneer in sustainable finance. It has already issued more than €20 billion in green bonds since 2014, but this transaction marks a milestone as the first hybrid bond to comply with the EU’s new green standard. The deal strengthens Iberdrola’s balance sheet while reinforcing its commitment to the EU’s climate and energy transition goals.
Market Reaction
Analysts note that the strong demand reflects both Iberdrola’s reputation as a leader in clean energy and the broader trend of investors seeking credible, EU-aligned green instruments. The issuance also demonstrates how hybrid bonds — which combine features of debt and equity — can be leveraged to finance long-term sustainability projects while maintaining financial flexibility.
Conclusion
Iberdrola’s €1 billion green hybrid bond sets a precedent in Europe’s sustainable finance market, combining record investor demand, low financing costs, and alignment with the EU Green Bond Standard. The transaction not only strengthens the company’s capital structure but also underscores the central role of green finance in accelerating the global energy transition.
Sources: Iberdrola Press Release, 29 Oct 2025; Energy Live News (30 Oct 2025); ESG News (30 Oct 2025).
