E.ON Acquires 25% Stake In Horisont Energi

Horisont Energi and European energy company E.ON announced that they have entered into a strategic cooperation agreement for the development of European end-to-end carbon capture, transport and storage service offering, development of a carbon removal business, and production and value chains for clean hydrogen and ammonia. Along with the agreement, Horisont Energi will carry out a private placement directed at E.ON, pursuant to which E.ON will acquire a 25 percent stake in Horisont Energi. The private placement is planned to be completed end of January 2022 subject to certain conditions.

“We’re extremely excited to be joining forces with the leading European energy company E.ON to contribute to the energy transition in Europe. With this agreement, we are entering long-term strategic cooperation with E.ON, solidified by the company taking a 25 percent ownership stake in Horisont Energi. This will enable Horisont and E.ON to play a decisive role in the decarbonization of key industrial sectors in Europe, whilst scaling up and commercializing CCS and clean ammonia,” says Bjørgulf Haukelidsæter Eidesen, CEO of Horisont Energi.

Patrick Lammers, a member of the board of E.ON said, “E.ON’s proposition in this market is to establish a comprehensive offering to our customers and partners by becoming a “one-stop-shop” for their decarbonization activities as part of our growth strategy. It will enable E.ON to deliver a full outsourcing proposition to decarbonize, from site-specific optimized carbon capture to secure long-term storage and clean hydrogen supply. Collaborating with Horisont Energi will enable us to be a first-mover in the future industrial carbon cycle business, that will be a key driver in European industrial and municipal decarbonization in the second half of the decade”.

According to the cooperation agreement between the two companies, E.ON will take responsibility for the carbon capture and liquefaction, whilst Horisont Energi will be responsible for the transport and sequestration of the carbon dioxide. The service will be offered to both existing and new customers of E.ON. The two companies will also mature and develop a business built upon carbon dioxide removal.

On December 14, 2021, the European Commission’s vision for carbon removal was released. According to the Commission’s plans, the legal proposal for the EU’s framework for carbon removal certification is due in the fourth quarter of 2022. In conjunction with this, the two companies are also going to develop business models on clean ammonia production and supply.

Recently, E.ON successfully issued two bond tranches with a combined volume of €1.3 billion, first one was €500 million bonds maturing in January 2026 with a coupon of 0.125% and the second one was €800 million green bonds maturing in October 2034 with a coupon of 0.875%. This transaction attracted a combined order book of €4.2 billion and allowed E.ON to secure large parts of its 2022 funding needs early in the year and with attractive coupons.

The proceeds of the shorter-dated bond will be used to fund general corporate purposes, proceeds of the long-dated green bond to finance and/or refinance Eligible Green Projects as defined in E.ON’s Green Bond Framework.