In Short

• EPH’s green bond issue raises doubts over its energy transition.
• Though the company has a renewable energy plan, it continues to operate fossil fuel plants.
• Investors are concerned about its financial stability and climate exposure.

EPH, a top operator of natural gas storage capacity in Slovakia, the Czech Republic, and Austria, issued another €500 million green bond in July 2025 following its 2024 issue, but IEEFA research raises concerns over its fossil fuel ties.

The Institute for Energy Economics and Financial Analysis (IEEFA) research says that these bonds, which were intended to fund sustainable projects, may not provide clarity to investors regarding how the money is being used.

Read More: Sustainable Bond Market Sees Sharp First-Half Decline in 2025

Kevin Leung, author of the research and a sustainable finance analyst at IEEFA, said: “It is likely that EPH’s latest green bonds will barely contribute to the company’s climate strategy.

“This lowers the bonds’ coherence and highlights the need for investors to closely scrutinise green credentials during asset selection.

“Investors should also assess whether bond proceeds are used for projects that meet their expectations for measurable, attributable environmental returns.”

Instead of funding renewable energy projects or cutting emissions directly, the study notes that the proceeds are predominantly used to refinance assets not linked to power generation, which makes it much harder to measure their environmental impact.

With over 90% of its power generation reliant on gas, coal, and lignite, the company is heavily dependent on fossil fuels and operates fossil fuel power plants across Europe, including in Germany, Italy, the Netherlands, and the UK.

The research points out that this will result in a climate transition risk, meaning that if the company does not use renewables, it will face financial and regulatory challenges, particularly as Europe pushes for decarbonisation.

Also Read: Pacific Basin Closes $250M Sustainability-Linked Loan for Green Goals

According to the report, EPH does not have a proper renewables strategy in place, which puts its 2050 net-zero goal in doubt. Though the company is transferring most of its coal assets to a sister company, the risks from these coal plants are still attributed to EPH. More importantly, this also reduces transparency for investors.

Though the new issue helps EPH extend its debt maturity and maintain access to the bond market, it will face a major refinancing in 2028, when these securities mature.

“EPH faces refinancing needs in the next three years. As transition planning becomes a key credit consideration for lenders, bondholders, and credit rating agencies, EPH may face tightening funding conditions if it fails to demonstrate credible progress,” Leung concludes.

Ends/

Want to boost sustainability across your business operations? Discover our ESG Marketplace, home to over 750 providers delivering a range of ESG and sustainability services.

Stay informed with the latest insights by following KnowESG’s Sustainable Finance News.

Explore our recent ESG Event updates.

Source: IEEFA