Duke Energy Corporation Sustainable Financing

Duke Energy Corporation

Duke Energy Corporation issues sustainable commercial paper notes to finance or refinance new and existing projects that have social or environmental benefits.

Sustainable Commercial Paper Notes

In August 2022, Duke Energy launched its inaugural sustainable CP notes. The sustainable CP notes were established with unique series documentation that describes how each sustainable CP issuance is intended to align with the Green Bond Principles, 2021, Social Bond Principles, 2021, and Sustainability Bond Guidelines, 2021. Each sustainable CP note is distinct from the general corporate purpose CP notes and is identifiable by a unique ticker and designated CUSIPs. Offerings of the sustainable CP notes will be made by a separate private placement memorandum from the general corporate purpose commercial paper notes.

For the period starting in August 2024, Duke Energy expects to have $200 million to $500 million of sustainable CP notes outstanding at any given point over the next 12 months. 

Below are the categories of eligible projects that Duke Energy intends to disburse or allocate an amount equal to or in excess of the net proceeds of the sustainable CP notes. It is Duke Energy’s intention to have the vast majority of the disbursements or allocations to eligible projects to be used toward socioeconomic advancement and empowerment. 

Socioeconomic Advancement and Empowerment: 

• Target population: suppliers certified by a third-party organization or government agency as being minority-, women-, veteran-, service-disabled veteran-, LGBT-, or disability-owned, or a Historically Underutilized Business Zone (HUBZone) business.^[1]
• Expenditures and programs related to enabling opportunities for target population. Examples include: procurement of products and services from diverse suppliers; education assistance related to technology, infrastructure and professional development for minority populations; resources to identify and fund businesses with diverse founders such as mentoring programs, access to professional services and networking.

Renewable Energy:

• Expenditures and investments related to the construction, development, expansion, production, acquisition, maintenance, transmission, research and development, and operation of renewable energy generation and infrastructure, including solar power and wind power.

Within 12 months after the first issuance of the sustainable commercial paper notes in August 2024, Duke Energy will make available a summary of the portfolio of eligible projects for which proceeds of the sustainable CP notes were disbursed or allocated during the previous reporting period. The summary will be readily available on a designated website until the next update, which will occur at least annually. This annual update report will include:

1. The average and peak amounts of sustainable CP notes outstanding during the prior reporting period
2. The dollar amount of the portfolio of eligible projects available to be financed with sustainable CP note issuances over the next 12 months 
3. Where feasible and subject to any confidentiality considerations, Duke Energy will report estimated environmental impacts (on at least an annual basis where relevant) 

Each annual update report will be accompanied by a report from an independent registered public accounting firm in respect of its examination of management’s assertion that the proceeds of sustainable commercial paper notes were used for eligible projects, conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

^{________________________
1}Historically Underutilized Business Zone (HUBZone) Business – A small business having its principal office in a historically underutilized business zone (HUBZone), that is 51% or more owned and controlled by one or more U.S. Citizens, a Community Development Corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization, or an Indian tribe with at least 35% of its employees residing in a HUBZone. HUBZone businesses are certified by the Small Business Administration.