Telefónica Deutschland obtains 4G/5G deployment loan with strict sustainability dimension

Telefónica’s German unit has secured a loan of EUR450 million from the European Investment Bank (EIB) to support its rollout of a 5G network to 30 cities by the end of 2022 and to enhance its existing LTE infrastructure. According to the EIB , the eight-year agreement imposes “great sustainability demands” on the borrower in light of the bank’s position to only finance projects that meet high environmental and social standards.

Telefónica Deutschland has already signed a EUR750 million syndicated loan with an interest margin linked to an external sustainability rating. The latest agreement represents financial support to expedite Telefónica’s 5G deployments in Germany and its expansion of mobile broadband services to underserved ‘white-spot’ areas, and is part of a growing trend in sustainability-linked funding (often referred to as ‘green loans’). Looking ahead, the “energy-efficient” 5G network could also be an important component to the operator fulfilling its goal for 100% renewable energy by 2030, as well as becoming carbon neutral by 2050 in line with the GSMA-led industry pledge.