(Bloomberg) -- Electricite de France SA is selling the first green bond in Europe that can be used to finance nuclear energy projects.

EDF is seeking to raise at least €500 million ($548 million) from the notes, which mature in 2027, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. Initial price discussions are around 105 to 110 basis points over mid-swaps.

The French utility intends to allocate the net proceeds to European Union-taxonomy aligned nuclear energy capital expenditures in existing French nuclear reactors via look-back — a way of financing historic expenditures.

EDF didn’t immediately respond to a request for comment.

EDF updated its green financing framework last year to include nuclear after EU lawmakers voted to give certain nuclear energy projects a sustainable label. It borrowed a green loan linked to its nuclear plants last November.

Once-Unthinkable Nuclear Green Bonds Are Coming to Europe

Despite getting official green approval, nuclear remains controversial amid concerns about waste disposal, the potential for weapons proliferation and the risk of accidental radiation. Historic nuclear catastrophes makes expanding the energy source a harder sell, and the decision to add nuclear to the bloc’s green taxonomy left the EU parliament deeply divided.

Some ethical investment strategies, a key source of demand for green bonds, also blacklist any financing of nuclear. That’s a barrier EDF has acknowledged: it said last year that it will distinguish between green bonds that finance nuclear and those that don’t, effectively creating two classes of debt.

While EDF’s sale marks Europe’s debut green bond that includes nuclear, it follows a more-established market in Canada. Utility Bruce Power LP sold what it said were the world’s first green bonds for nuclear power in 2021.

Green bond sales globally this year have totaled $603.9 billion, up slightly from the $596.2 billion of sales last year, according to data compiled by Bloomberg Intelligence.

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