BNP Paribas has collaborated with EDF ENR, a subsidiary of the French utility company EDF, to refinance a solar energy project involving the tokenisation of renewable energy bonds.

The company created, tokenised, and distributed a bond, the proceeds of which would be used to refinance an EDF ENR-sponsored solar energy project.

As the first tokenisation of a renewable energy bond of its kind on the project financing market, BNP Paribas claims the digital asset will expand the scope and improve the efficiency of project financing, including greater transparency of environmental, social, and governance (ESG) data along the value chain.

Tokenisation enables greater granularity for smaller quantities of ESG-linked finance, allowing for an approach that can facilitate the development of smaller renewable energy projects by providing investors with dynamic bundling opportunities.

BNP Paribas leveraged its tokenisation platform AssetFoundry and utility tokens minted with low-carbon energy by EDF subsidiary Exaion to secure the blockchain's use of clean energy for the transaction.

Within 48 hours, the tokenised bond was converted back into a conventional bond to evaluate token reversibility. It is a crucial component for interoperability with traditional systems, said BNP Paribas.

David Bouchoucha, head of private debt and real assets at BNP Paribas Asset Management, said: “Innovation and sustainability are at the heart of our investment philosophy for private debt investing.

“Tokenisation and blockchain are opening exciting new opportunities to diversify portfolios for our clients, hence our commitment to work with strong partners on those new developments.”

Arnaud Boyer, the chief digital officer at BNP Paribas Corporate and Institutional Banking, commented: “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."

Source: Securities Finance Times

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