Iniciativa Brasileira de Finanças Verdes: Traça estratégia de 2018 para economia de baixo carbono, investimentos verdes, parcerias internacionais e mais!

December 14, 2017, 4:00 pm

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Aumento nas emissões de títulos verdes em 2017 fortalece plataforma para expansão do mercado

Conta Mais

Membros da Iniciativa Brasileira de Finanças Verdes (anteriormente denominada Conselho Brasileiro de Desenvolvimento do Mercado) estiveram ontem em São Paulo para a reunião final de 2017. No topo da agenda de discussão estavam as estratégias para o próximo ano, com o objetivo de aumentar a presença internacional do Brasil em finanças verdes, o crescente investimento em infraestrutura sustentável e o mercado interno de títulos verdes.

Entre os principais objetivos, a IBFV se concentrará:

• No desenvolvimento de bases para investimentos verdes no Brasil,

como recursos de infraestrutura em sistemas de energia;
eficiência energética para construções;
sistemas de água e saneamento.

• Na mobilização da base de investidores locais e,

• Na construção de parcerias internacionais em finanças verdes.

Comentários

As declarações para a Climate Bonds feitas pelos membros do IBFV refletem um compromisso compartilhado, construindo oportunidades de investimento e diretrizes sustentáveis:

Sylvia Coutinho, CEO do Banco UBS:

"Apesar dos desafios que o Brasil enfrentou em 2017, vejo a agenda de finanças verdes evoluindo com uma melhor compreensão dos agentes do mercado e alguns benchmarks estrangeiros. O Brasil tem um potencial indiscutível para atrair capital dessa natureza e devemos seguir nesse caminho. Nosso grupo possui todos os conhecimentos necessários para fazer o ano de 2018 ainda melhor".

Marina Grossi, Presidente CEBDS:

"Estou extremamente feliz em ver a consolidação da Iniciativa Brasileira de Finanças Verdes em 2017. O setor agora oferece muitas oportunidades para alavancar a oferta e a demanda e o desafio será ter nossas ações coordenadas para aproveitar esse cenário de forma completa".

"As discussões em torno da realização da COP 25 no Brasil em 2019 são uma prova do enorme potencial do país nesta agenda".

André Salcedo, Mercado de Capitais, BNDES:

"Esta iniciativa tem um papel importante na captura do potencial que o Brasil possui em finanças verdes. 2018 trará mais oportunidades no uso dos mercados de capitais para financiar projetos sustentáveis, e este grupo tem a missão de coordenar e mobilizar diferentes atores desse mercado para impulsionar a agenda. Estou confiante de que temos um ano promissor à frente".

Justine Leigh-Bell, Diretora ds Climate Bonds Initiative:

"O Brasil segue caminhando como um futuro líder em finanças verdes. Em 2017, o país superou a marca de 11 bilhões de reais nas emissões de títulos verdes com ênfase em investimentos em agricultura de baixo carbono, infraestrutura sustentável e energia renovável".

"Continuaremos trabalhando duro nessas agendas no próximo ano, identificando desafios e soluções para como canalizar os fluxos de capital privado (nacional e internacional) para financiar esses projetos".

Por último – 2017 Um ano de conquistas para as Finanças Verdes no Brasil

O mercado brasileiro de títulos verdes consolidou-se em 2017, superando a marca de R$11 bilhões, de acordo com a segunda edição do relatório Títulos de Dívida & Mudanças Climáticas: Análise do Mercado 2017, lançado em outubro. De junho de 2015 a setembro de 2017, o Brasil emitiu 9 títulos verdes, cinco deles no mercado internacional.

Outro marco importante para a agenda de investimento sustentável do país foi o 2º Diálogo Econômico e Financeiro do Reino Unido-Brasil e o lançamento da Parceria de Finanças Verdes Reino Unido-Brasil, um compromisso para promoção de um crescimento econômico sustentável.

Como disse o ministro das Finanças e chanceler Philip Hammond, "aprofundando os laços de desenvolvimento sustentável entre os dois países, impulsionando a inovação, a liderança ética e, conseqüentemente, aumentando os fluxos de capital verde".

O ano de 2017 também viu a criação do Laboratório de Inovação Financeira (LAB), que reúne entidades públicas e privadas para melhorar os instrumentos financeiros voltados para a sustentabilidade. A iniciativa é liderada pelo Banco Interamericano de Desenvolvimento (BID) em parceria com a Comissão de Valores Mobiliários (CVM) e a Associação Brasileira de Desenvolvimento (ABDE).

O LAB organizou seus grupos de trabalho em torno de três temas principais: títulos verdes, finanças verdes e instrumentos financeiros para investimentos de impacto social.

A lista não estaria completa sem mencionar o título verde de $1bi do BNDES para energia solar e eólica.

Uma lista completa com os mais importantes desenolvimentos e títulos verdes do mercado de finanças verdes brasileiro pode ser encontrado na nossa página dedicada ao Brasil.

É sempre bom lembrar...

O Brasil é grande; tem a maior área de terras aráveis do mundo em um único país, é a maior economia da América Latina e a nona do mundo.

É também o 5º do mundo em termos de população. Sua maior cidade, São Paulo, está entre as 20 principais megacidades globais em 2016, e deve permanecer neste grupo em 2030 com uma população estimada de quase 25 milhões.

Esperamos muito mais em 2018, com o apoio da Iniciativa e de outros atores-chave nesta grande agenda de financiamento verde.

Até mais,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument or investment product and no information within this communication should be taken as such, nor should any information in this communication be relied upon in making any investment decision.

Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or international laws.

A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

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Brazil Green Finance Initiative: Sets 2018 strategy for low carbon economy, green investment, international partnerships and more!

December 14, 2017, 4:00 pm

≫ Next: November Media digest – FT x 6, Reuters, South China Morning Post with big news from Barclays, Bank of China and more!

≪ Previous: Iniciativa Brasileira de Finanças Verdes: Traça estratégia de 2018 para economia de baixo carbono, investimentos verdes, parcerias internacionais e mais!

Strong green bonds growth in 2017 a solid platform for market expansion

What’s it all about?

The Brazil Green Finance Initiative (previously named Brazil Market Development Council) gathered on yesterday in São Paulo for the final meeting of 2017.

High on the agenda were strategies for the year ahea, aimed at increasing Brazil’s international presence in green finance, growing infrastructure investment and the domestic green bonds market.

The main objectives the BGFI will focus on in 2018 include:

developing Brazil’s green investment pipeline,
- infrastructure assets across energy systems
- energy efficiency for existing buildings and
- water/sanitation were identified as the low hanging fruit to focus on
mobilizing the local investor base and,
building international partnerships on green finance.

Who’s saying what?

Statements after the meeting by BGFI members reflect a shared commitment building investment opportunities and green directions:

Sylvia Coutinho, CEO, UBS Bank:

“Despite the challenges Brazil faced in 2017, I see the green finance agenda evolving with better understanding of the market agents and some foreign benchmarks. Brazil has this indisputable potential to attract capital of this nature and we have to follow the stewardship of this initiative. Our group has all the expertise to make 2018 even better.”

Marina Grossi, President CEBDS:

“I’m extremely happy to see the consolidation on the Brazil Green Finance Initiative in 2017. The sector now offers many opportunities to leverage supply and demand and the challenge will be to have our actions coordinated to fully enjoy this scenario.”

“The discussions around the realization of COP 25 in Brazil in 2019 is proof of the enormous potential of the country in this agenda.”

André Salcedo, Capital Markets, BNDES:

“This initiative has an important role in capturing the potential Brazil has in green finance. 2018 will bring more opportunities in the use of capital markets to finance sustainable projects and this group has the mission to coordinate and mobilize different actors to push this agenda forward. I’m confident we have a promising year ahead of us.”

Justine Leigh-Bell, Director of Market Development, Climate Bonds Initiative:

"Brazil is on track to positioning itself as a future leader in green finance. The country has surpassed the 11 billion reais (USD3.7bn) mark in green bond issuances with emphasis on investments in low carbon agriculture, sustainable infrastructure and renewable energy.”

“We will continue to work hard on these agendas next year, identifying challenges and solutions for how to channel private capital flows (domestic and international) at scale to finance these projects."

The Last Word – 2017 A Year of Milestones for Brazil’s Green Finance

The Brazilian green bond market consolidated in 2017, surpassing the mark of BRL11 billion according to the second edition of the Bonds & Climate Change: State of the Market 2017 Brazil report, launched in October. From June 2015 until September 2017, Brazil has seen 9 green bond issuances, five of them in the international market.

Another important milestone for the country's sustainable investment agenda was the UK-Brazil 2nd Economic and Financial Dialogue and the launch of the UK-Brazil Green Finance Partnership in a commitment to promote sustainable economic growth.

UK Finance Minister and Chancellor Philip Hammond characterised the Partnership as:

"deepening the ties of sustainable development between the two countries, boosting innovation, ethical leadership and, consequently, increasing green capital flows".

2017 also saw creation of the Laboratory of Financial Innovation (LAB) which brings together public and private entities to improve financial instruments focused on sustainability. The initiative is led by the Inter-American Development Bank (IADB) in partnership with the Brazilian Securities and Exchange Commission (CVM) and the Brazilian Development Association (ABDE).

The LAB has organized its working groups around three main themes: green bonds, green finance and financial instruments for investments of social impact.

And no list of Brazilian green finance milestones during the year would be complete with noting the BNDES $1bn green bond for wind and solar.

There's a full rundown of all greens bond reports and market developments on our Brazil project page.

Brazil is Big

We’ve noted the numbers before but let’s have a reminder…

Brazil is big; it has the world’s largest area of arable land in a single country, is the biggest economy in Latin America and 9^th largest internationally.

It's also the 5^th in population. The largest city, São Paulo, is amongst the top 20 global megacities in 2016, and is set to remain there in 2030 with an estimated population reaching 25 million.

We expect a lot more milestones to come year with the support of the BGFI and other key players in green finance.

'Till next time,

Climate Bonds

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November Media digest – FT x 6, Reuters, South China Morning Post with big news from Barclays, Bank of China and more!

December 18, 2017, 4:00 pm

≫ Next: Nigeria Issues Climate Bonds Certified Sovereign Green Bond: Signals ‘more to come’ as part of Paris NDC objectives

≪ Previous: Brazil Green Finance Initiative: Sets 2018 strategy for low carbon economy, green investment, international partnerships and more!

Green bonds issuance hitting the record $100 mark, certified green bonds from Barclays, Bank of China, ICBC and China Development Bank... Yes, November was a month full of big news for the green bonds market! Here is the selection of media coverage for a busy November.

Magic $100 billion mark

As we reported in November, green bonds issuance hit $100 billion mark during COP23! See what media are saying.

Reuters, Green bond deals hit record $100 billion in year to date: data, Nina Chestney

Global green bond deals will top the $100 billion mark on Thursday and hit a new record, putting them on track to reach $130 billion by the end of the year, data from the Climate Bonds Initiative (CBI) showed.

Business Green, Green bonds clear $100bn mark for the first time

Climate Bonds Initiative confirms 2017 will be the first year when over $100bn of green bonds have been issued.

PV Tech, Green Bond issuance surpasses US$100 billion in 2017, Tom Kenning

Last year saw a previous record of US$81.6 billion issuances, but CBI forecasts an estimated US$130 billion to be reached by the end of this year.

Energy Live News, Global green finance reaches record $100bn

China leads the issuance, followed by France, the US, Germany, Netherlands, Sweden, Mexico, Spain, India and Canada.

Climate Action Programme, Green bonds reach $100 billion milestone

According to Climate Bonds Initiative, the top countries for 2017 are China, with more than $16 billion green bonds issued, France with $15 billion, and the US with approximately $14 billion in green bonds.

SolarQuarter, Green bonds reach $100 billion milestone

As the organization [CBI] states, the milestone was reached due to several global banks creating a momentum for green bonds.

More Market News

Financial Times, Green bond issuers are poised to charge a premium, Kate Allen

Pricing advantage emerging for green bonds?

As volumes of environmentally friendly and socially responsible finance-raising grow rapidly, the increasing depth of the market could result in the emergence of a premium in prices and lower yields for such paper.

Financial Times,Green bond issues hit record high on ‘sustained global momentum’, Kate Allen

Record green bonds issuance as reported by Moody’s picked up by Financial Times.

According to new figures from credit-rating agency Moody’s, nearly $95bn of green bonds were issued globally in the first three-quarters of this year — up 49 per cent year on year — with full-year volumes set to top $120bn for the first time.

Financial Times, Green bond issuance booms, set to top $120bn this year

Another FT article stressing the $120bn figure that Moody’s expect the green bonds market to reach by year-end.

Matthew Kuchtyak, a Moody’s analyst, said there was “sustained global momentum” in the green bond market, with an increasing volume of transactions coming from emerging markets.

Reuters, HSBC pledges $100 billion of finance by 2025 to combat climate change, Nina Chestney

That declaration attracted a lot of media attention in November.

HSBC said it will facilitate financial flows to help boost support for clean energy and lower carbon technologies.

Business Green, HSBC pledges to deliver $100bn of green finance through to 2025, James Murray

HSBC has become the latest banking giant to unveil sweeping new green investment plans, confirming today that it intends to deliver $100bn of low carbon and sustainable finance through to 2025.

South China Morning Post, Why some Chinese green bonds are ‘not so green’ in the eyes of international investors, Georgina Lee

Difference between green bond standards set by the PBOC and Climate Bonds Standard explained.

A main difference lies in the use of proceeds. The NDRC regulation allows issuers to use up to 50 per cent of the funds to repay bank loans, or invest in general working capital; whereas for institutional investors outside China, they accept only issuers that use 95 per cent of the proceeds for green assets or projects, according to the CBI.

Investments & Pensions Europe, China, EIB collaboration seeks 'common language' for green finance, Susanna Rust

A step towards harmonizing green finance standards between China and EU

The European Investment Bank (EIB) and the China Green Finance Committee (CGFC) have presented the initial conclusions of a project that ultimately seeks to facilitate the establishment of a common language in green finance, or “a standard-neutral taxonomy for the environmental use of proceeds”.

FTSE Global Markets, SK Securities/Climate Bonds promote green economy in South Korea

FTSE reporting on the Memorandum of Understanding (MoU) signed between SK Securities and the Climate Bonds Initiative with the aim of advancing green economic development and expanding South Korea’s green bond market.

Sean Kidney, CEO Climate Bonds Initiative adds, “There are enormous low carbon investment opportunities for South Korea. Implementation of climate plans, sustainable development and green infrastructure domestically and across Asia provides many directions to develop green finance.”

Private Wealth, Green Bonds: 5 Things To Know About A Growing Investment Opportunity

Facts you shouldn’t miss when making a green bond investment decision.

Green bonds (…) saw about $81 billion in corporate, municipal and sovereign issuances last year, according to the Climate Bonds Initiative (CBI), and are estimated to be $130 billion in 2017.

AltEnergyStocks, Second Largest Quarter For Green Bonds Ever

AltEnergyStocks publishes our blog post covering green bonds market developments in Q3.

The green bond market has kept its strong pace in Quarter 3 2017, reaching a total of USD27.7bn from July to September.

Wealth Professional, Green bond issuances reach new heights, Gerv Tacadena

Wealth Professional presents findings of the Bonds and Climate Change: Canada Report.

According to the 2017 Bonds and Climate Change: State of the Market Canada report by the Smart Prosperity Institute and the Climate Bonds Initiative, Canada's green bond issuance this year exceeded that of the recent years combined.

Financial Post, The case for a Canadian sovereign green bond, Barry Critchley

Ottawa should issue a sovereign bond that would provide “the scale and liquidity” the nascent green bond market needs, according to the State of the Market report.

Climate Bonds Standard certified bonds this month

BARCLAYS

On the first day of COP23, Barclays issued a EUR500m green bond certified under the Low Carbon Buildings Criteria of the Climate Bonds Standard. Read more here.

Financial Times, Banks help to bring climate change for green bonds, Thomas Hale

Last week, Barclays sold the first green bond from a UK financial institution linked to assets within the country. The €500m deal, which attracted almost €2bn of orders, followed other inaugural deals for banks in the burgeoning market for green financing.

Financial Times, Barclays launches first UK bank green bond to fund British assets, Thomas Hale

The Barclays deal paves the way for financial institutions — which are major sellers of bonds across Europe — to expand their issuance in the market.

CityAM, HSBC and Barclays throw weight behind green finance projects, Jasper Jolly

According to the Climate Bonds Initiative, a charity which promotes green bonds, $94bn (£72bn) has been raised so far over the course of 2017. Some 40 green bonds are listed on the London Stock Exchange.

The Financial, UK first as Barclays issues €500m Green Bond

Sean Kidney, Founder and CEO of Climate Bonds Initiative, said: “Barclays has taken a lead among UK banks and FTSE 100 companies with this innovative certified green bond, that is an example of international best practice standards. (…)”

Climate Action Programme, Barclays issues €500 million bond for “green mortgages”

Sean Kidney (…) commented: "The UK green bond market has been slow to develop, lagging many G20 and EU nations. This new Barclays green bond should trigger more global banks and Financial Times Stock Exchange 100 Index (FTSE) companies to act and initiate their own green bond programs into 2018”.

Business Green, 'UK first': Barclays issues €500m Green Bond, James Murray

Banking giant says first green bond issued by a UK bank using UK assets attracted final order book of €1.85bn.

Capital, Barclays sees strong demand for green bond, James Hester

Barclays began issuing green bonds today as it seeks to become a leader in the niche, climate-friendly segment.

BANK OF CHINA

The third green bond issued by the Bank of China is Climate Bonds certified! Read more here.

Reuters, Bank of China issues green bond in Paris - Xinhua

One of China’s biggest banks, state-owned Bank of China, has issued a green bond denominated in the Chinese yuan currency in Paris, the first of its kind in France.

Financial Times, Bank of China Paris branch sells triple-currency ‘climate bond’, Gabriel Wildau

The deal is certified by the Climate Bond Initiative, a London-based advocacy group that sets standards for green finance.

Xinhua.net, Spotlight: China's green bond market goes to internationalization: expert

"The three large Chinese banks -- Bank of China (BOC), Industrial and Commercial Bank of China (ICBC) and China Development Bank (CDB) -- all have issued climate bonds, certified green bonds and it is a sign of the internationalization of China's bond market," Kidney told Xinhua.

Leaders League, Bank of China Paris Issues $1.5bn Equivalent Third Offshore Green Bonds, Jeanne Yizhen Yin

On the occasion of 2nd anniversary of COP21 and Paris Accord, Bank of China Paris Branch has priced its third offshore Green Bonds. The move, which took place on November 15th, is certificated by the Climate Bonds Initiative (CBI) (…).

Business Standard, China's green bond market goes to internationalization: Expert

"There has been very strong demand from offshore investors for quality green bonds, and the demands for this Bank of China green bonds from international investors reflects that there is an appetite there for certified, quality green issuance out of China," said Kidney.

ICBC

ICBC issued its inaugural green bond also certified under the Climate Bonds Standard at the end of October. More here.

Delano, Chinese bank floats green bonds on lux bourse, Aaron Grunwald

Finance and government officials are ringing the ceremonial bell at the Luxembourg Stock Exchange on 30 October to mark the successful listing by ICBC of the world’s first climate bonds that are part of the “Belt and Road Initiative”.

Bourse Luxembourg, ICBC lists its inaugural “Belt and Road” climate bond in Luxembourg

The Climate Bond Initiative has certified the bonds as climate bonds. They are now listed on LuxSE’s Euro MTF market and displayed on the Luxembourg Green Exchange (LGX).

CHINA DEVELOPMENT BANK

And the third green bond from China this month is certified under the Climate Bonds Standard!

Nikkei Asian Review, China Development Bank Prices 5-Year $500 Million Green Bond, Amy Lam

Policy lender China Development Bank has set the coupon for its $500 million five-year Green Bond issue at 2.75%, according to a termsheet for the offer. (…) The bonds obtained the Climate Bonds Initiative Certification on Nov. 6.

Institutional Asset Manager, China Development Bank issues green bond on CEINEX market place in Frankfurt

The CDB green bond is in line with the Green Bond Principle (2017) by the International Capital Markets Association (ICMA) and has obtained the Climate Bonds Initiative Certification by the independent Climate Bonds Initiative (CBI).

INDIAN POWER FINANCE CORPORATION

An inaugural green bond from 4th largest railway network in the world also certified! Read more.

LiveMint, Power Finance lists green bond on London Stock Exchange, Aditi Khanna

India’s Power Finance Corp.’s (PFC) has listed its first international bond in almost two decades on the London Stock Exchange to finance renewable energy projects in the UK. The 10-year dated green bond raised $400 million.

The Economic Times, Power Finance Corp lists green bond on London Stock Exchange

The latest Climate Bonds Initiative certified bond is the seventh green bond listed on London Stock Exchange in November 2017, and the fifth green bond by an Indian issuer in London.

Climate Change News, India raises $400m green bond to fund renewables drive, Megan Darby

The projects will be independently verified and certified by the Climate Bonds Initiative (CBI), to ensure they are sustainable, according to the framework document.

The Tribune India, India’s Power Finance Corp lists green bond on London Stock Exchange

“PFC is unlocking and promoting green finance across India, enabling the country to achieve its ambitious climate change targets set out under the COP21 agreement,” said Nikhil Rathi, CEO of London Stock Exchange Plc.

India Today, Indias Power Finance Corp lists green bond on London Stock

"The funds raised will help promote renewable energy projects across the country and aid in achieving the government’s target of 175GW of installed renewable energy capacity by 2022," said PFC chairman Rajeev Sharma.

The Hindu Business Line, PFC lists green bond on London Stock Exchange

According to LSE, green bonds in London had raised over $3.2 billion in November 2017 alone. There are 59 green bonds listed in London that have raised over $19.5 billion in aggregate terms across seven currencies.

MANULIFE

Certified green bond from a Singaporean life insurer.

Advisor.ca, Manulife becomes first life insurer to offer green bond

Manulife Financial Corporation has issued Climate Bonds in Singapore certified by the Climate Bonds Initiative, an investor-focused not-for-profit organization that promotes large-scale investment in the low-carbon economy.

Finews Asia, Manulife Goes Green in Singapore

Manulife Financial said it placed SG$500 million worth of «green bonds,» its first issuance of an instrument meant to raise capital for projects with environmental benefits.

The Business Times, Manulife prices first green bond; S$500m of 12-year notes offer 3% coupon, Rachel Mui

Manulife said that the bonds are the first green bond of benchmark size issued by a life insurance company.

The Straits Times, Manulife prices its first green bond

Manulife's first green bond is only the second Singdollar green bond and the third by Singapore corporates to hit the market.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

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Nigeria Issues Climate Bonds Certified Sovereign Green Bond: Signals ‘more to come’ as part of Paris NDC objectives

December 18, 2017, 4:00 pm

≫ Next: Public consultation opens for new V3.0 of the Climate Bonds Standard - Next iteration of the overarching multi-sector Standard available for review now!

≪ Previous: November Media digest – FT x 6, Reuters, South China Morning Post with big news from Barclays, Bank of China and more!

A big first for Africa and a big step for green finance - Nigeria aligns sovereign issuance to best practice model, pointer for nations to follow

What's it all about?

Nigeria has given the 'Year of Sovereign Green Bonds' a late December boost, becoming:

- The first African nation to issue a sovereign green bond,

- The first Climate Bonds Certified sovereign bond, and

- (Only) The fourth nation in the world to issue one - after Poland, France, and COP23 President, Fiji.

The debut NGN10.69bn green bond has been described as a “pilot sovereign” of a foreshadowed NGN 150 billion green bond program by the Ministry of the Environment and has come to market after an extensive development process involving domestic and international stakeholders.

The 5-year bond settles on December 22^nd with a Debt Management Office Fact Sheet setting out a climate based rationale to the issuance. Chapel Hill Denham is the financial adviser.

Green light from Moody’s, DNV GL and Climate Bonds

Moody's Investors Service has assigned a Green Bond Assessment of GB1 (Excellent) to the issuance and is expected to be listed on the Nigerian Stock Exchange (NSE) by the Nigerian Debt Management Office (DMO).

In a statement issued on Dec 13^th, Rahul Ghosh, a Moody's Senior Vice President said: “…the Government of Nigeria has put in place a comprehensive governance structure and framework that is aligned with the country's domestic green bond guidelines and international best practices.”

Climate Bonds worked in partnership with Moody’s on the review processes and global verifier and sustainability experts, DNV GL, provided the assessment of the bond towards the Climate Bonds Certification, against our international Standard, the first sovereign issuance to attain this best practice recognition.

The bond will fund a range of renewable energy, afforestation, and environmental projects.

Continuing support for the overall program via the Green Bond Private Public Sector Advisory Group, which comprises of external development partners: World Bank, IFC, African Development Bank, UNEP and the Climate Bonds Initiative, and also includes independent regulators, capital market operators, and relevant ministries.

Who’s saying what?

The Honourable Minister for State for Environment, Ibrahim Usman Jibril:

”Climate Change is real, and business, government and the capital market need to work together to slow its effects. This pilot green bond, which we expect to be the first of many more, has developed the platform to address the nation’s target of reducing its emissions by 20% unconditionally and 45% conditionally by 2030.”

Climate Bonds Director of Market Development, Justine Leigh-Bell:

“This debut sovereign issuance is part of Nigeria’s many efforts directed towards its Paris based NDC commitments. National leadership combined with international support has achieved the first stage of a long-term green investment pipeline. The wider objective is to build capital flows across Nigeria’s vast economy that contribute towards domestic climate and environmental goals.”

The Last Word

International support and best practice

Initially mooted in May 2016 by the then Environment Minister Amina J. Mohammed, and supported by Finance Minister Kemi Adeosun, the Nigerian green bond goal gained widespread attention after being formally announced by President Buhari at the October 2016 signing of Nigeria’s Paris Accord NDC commitment during Climate Week NYC.

Since that announcement by the President, support and assistance has come from many quarters with the UNEP Inquiry, Nigerian Stock Exchange (NSE), Citi Bank, Chapel Hill Denham, World Bank and EY all playing a positive role and FSD Africa providing vital funding.

At Climate Bonds we’re happy to publicly congratulate Nigeria on their leadership, now the flag bearer for green finance in Africa. Formal acknowledgement must also go to all of the organisations that have helped along the way.

Well done!

‘Till next time,

Climate Bonds

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Public consultation opens for new V3.0 of the Climate Bonds Standard - Next iteration of the overarching multi-sector Standard available for review now!

December 21, 2017, 4:00 pm

≫ Next: January Events: From Mumbai, to Beijing, Hong Kong, Vienna, Rabat & Kigali: four different continents for a great start into 2018!

≪ Previous: Nigeria Issues Climate Bonds Certified Sovereign Green Bond: Signals ‘more to come’ as part of Paris NDC objectives

Early Christmas present for green bonds enthusiasts! 2-month public consultation: Feedback by February 18^th,Official release in March 2018

What's it all about?

The draft of the Climate Bonds Standard Version 3.0 has now opened for a 60-days public consultation period.

Comment is sought from green bond issuers, investors, verifiers and other stakeholders.

A good read to keep green bonds enthusiasts engaged during the holiday period, and a motivation to start the New Year with some climate finance action.

What is the Climate Bonds Standard?

The Standard is an overarching multi-sector screening tool that allows investors and intermediaries to easily assess the environmental integrity of bonds claiming to be green and funding the low carbon and climate resilient future.

The Climate Bonds Standard provides clear, sector-specific eligibility criteria for assets and projects that can be used for green bond issuance.

If criteria requirements are met, the bond can be Certified by the Climate Bonds Standard Board attesting the alignment of the bond to a 2 degrees scenario and zero emission trajectory.

A list of Certified Climate Bonds and how to get a green bond Certified are available here.

How did we get here?

Standard 2.0 was released in December 2015, providing investors in the aftermath of the Paris COP21 Conference with improved guidance for climate and green based investment.

Standard 2.1, released in January 2017, incorporated a range of process improvements including an expansion of the range of debt instruments that could be Certified under the Standard and the inclusion of a Programmatic Certification option that streamlined the verification process for regular issuers with large portfolios of eligible assets.

A quick scan through our last three 2017 Quarterly Newsletters shows that the Programmatic Certification option has become immediately popular among large multiple green issuers including global banks, transport operators and energy companies.

What’s new in the V3.0?

Standard V3.0 has been based on feedback from green finance markets stakeholders, similar to the processes used to develop previous versions (V1, V2.0, and V2.1).

The V3.0 also builds on the collaboration with the Green Bond Principles (GBP) to reinforce a framework with global and wide applicability, and reinforcing similarities in structure and terminology.

The structural changes clarify the alignment with the 2017 GBP structure, including smaller changes to the actual requirements of the Standard regarding characteristics of green bonds and assets, to establish international consistency in the green label.

What does it mean?

Increased requirements for disclosure, in line with GBP 2017.
More clarity on reporting requirements, before and after issuance of the bond.
Further flexibility for issuers with staged allocation of proceeds.

In addition, V3.0 has a clearer definitional approach to the core elements of the Climate Bonds Standard:

Pre-issuance requirements,
Post-issuance requirements,
Green definitions, and
Certification process.

More to come in 2018

In the past months, we have seen the Standard expand its criteria to Marine Renewable Energy, opened Phase 2 of the Water Criteria for public consultation in October (until January 13^th) and launched the England and Wales regional certification criteria for Low Carbon Buildings, the first of a series to be released in the coming months.

There will be a slew of Criteria development announcements during the first quarter of 2018 as Climate Bonds expands the sectors eligible for Certification.

The final V3.0 document, will be launched on the eve of the Climate Bonds Annual Conference in London, March 2018.

There is a lot to come next year, but meantime...

- Climate Bonds

P.S: Haven’t grabbed an ‘Early Bird’ registration for the big March Conference?

If you’ve got this far in a Xmas Blog about Standards, you’re definitely a green bond enthusiast. Check the agenda and register now.

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January Events: From Mumbai, to Beijing, Hong Kong, Vienna, Rabat & Kigali: four different continents for a great start into 2018!

January 1, 2018, 4:00 pm

≫ Next: Handelsbanken: Latest addition to our Partners Program!

≪ Previous: Public consultation opens for new V3.0 of the Climate Bonds Standard - Next iteration of the overarching multi-sector Standard available for review now!

2017 has been a great year: Among numerous achievements, we reached the $100 billion benchmark and we’re sure 2018 will be even more rewarding. This month we’ll be flying to India, China, Austria, Morocco and Rwanda.

Meet Sean at the 40th IOSCO Africa and Middle East Regional Committee Conference in Rabat, Manuel at Euromoney in Vienna, or Ivy at the Sustainable Investing: from niche to mainstream event in Hong Kong.

Find below a full list of our January Events:

When?	Where?	Who?	What?
8^th–10^th January	Mumbai	Sean Kidney	Participating in meetings with corporations interested in green bond issuance
10^th–12^th January	Beijing	Sean Kidney	Participating in meetings with green bond stakeholders
16^th January	Hong Kong	Ivy Lau	Speaking at the event Sustainable Investing: from niche to mainstream, hosted by European Chamber of Commerce Hong Kong, sponsored by Luxembourg Stock Exchange, The Association of the Luxembourg Fund Industry, LuxFLAG and RBC
17^th January	Vienna	Manuel Adamini	Speaking at Euromoney, The Central & Eastern European Forum 2018
25^th January	Rabat	Sean Kidney	Speaking at the 40th IOSCO Africa and Middle East Regional Committee (AMERC) Conference on “Market Based Financing in Africa and the Middle-East: Challenges & Opportunities”
25^th–26^th January	Kigali	Olumide Lala	Meeting with Rwandan government ministers and development agencies

There’s a special event in 2018 that you cannot miss and it’s the Climate Bonds Initiative Annual Conference. It will take place in London in March 2018, with international market actors, leaders and policymakers gathering to discuss and debate how to scale global green bond markets from billions to trillions.

You can grab an Early Bird ticket and save 25% off the full price. But don't wait too long, you only have until the 31^st of January. Register now.

‘Till next time,

Climate Bonds

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Handelsbanken: Latest addition to our Partners Program!

January 4, 2018, 4:00 pm

≫ Next: 2017 GB Issuance: USD155.5bn: New Record! All the 2017 numbers that count in our Green Bond Highlights report: Plus our Seven Super Trends and 2018 green bonds forecast!

≪ Previous: January Events: From Mumbai, to Beijing, Hong Kong, Vienna, Rabat & Kigali: four different continents for a great start into 2018!

Swedish bank joins our expanding network

One of Sweden’s leading banks, Handelsbanken is the latest financial institution to join our Partners Program. Partners assist in developing climate finance solutions, market development committees and help define policy agendas for national, regional and sector based programs.

Handelsbanken already integrates sustainability into its long-term perspective and has already signed numerous voluntary agreements, including the UN’s Banks and the Environment programme (UNEP FI), the UN’s Global Compact, and the UN Principles of Responsible Investment (PRI). With branch operations beyond Sweden including Norway, Finland, Denmark, the UK and the Netherlands, the bank has seen steady growth in the past years.

The Nordic bank has also been active within the green bonds market and contributed to its development by serving as an advisor to green bonds issuers, consulting one third of Nordic issuers in 2016.

Who’s saying what?

Tobias Lindbergh, Head of Sustainable Finance, Handelsbanken

"Handelsbanken has been active in green and sustainable finance for many years. We've advised clients on green bond frameworks and supported the growth of the market in many ways, for instance by hosting conferences, publishing newsletters and enabling stakeholder dialogue. The Climate Bonds Initiative has played an important role in the global growth of green bonds and sustainable finance on topics such as standardization, a source of news and raising awareness of the importance of financial markets to tackle climate change. We are glad to become a partner and support this important work."

Elisabet Jamal Bergström, Head of Sustainability, Handelsbanken

"Climate action is a great challenge for all businesses, including the financial sector. As a long-term and risk conscious bank, we see a huge opportunity in contributing to sustainable development and at the same time doing better business throughout our value chain. We want to partner with our customers and provide solutions that address sustainability, such as green loans or sustainable savings and asset management services."

Sean Kidney, CEO, Climate Bonds Initiative

"Handelsbanken is an example of the climate and sustainability leadership that is one of the hallmarks of Sweden’s finance sector and at an international level Scandinavian nations. With this new partnership, we intend to build on those strengths and work together to further develop regional and sub-sovereign green investment models and market growth.”

The Last Word

As our third Partner among Nordic countries – and the second from Sweden, partnering with Handelsbanken provides an opportunity to work cooperatively with a leading regional stakeholder.

We’re looking forward to it.

Välkommen!

‘Till next time,

Climate Bonds

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2017 GB Issuance: USD155.5bn: New Record! All the 2017 numbers that count in our Green Bond Highlights report: Plus our Seven Super Trends and 2018 green bonds forecast!

January 9, 2018, 4:00 pm

≫ Next: How to get to a $1tn Green Bond Market? Find answers at our Annual Conference-March 2018!

≪ Previous: Handelsbanken: Latest addition to our Partners Program!

New annual record for global green finance. US, China, France lead Top10. New Issuers, new markets, use of proceeds on track & more numbers!

Plus our 7 super trends to watch for in 2018 including our USD 250-300bn initial forecast for the full year.

Lastly…A big shout for our 20^th-21^st March Annual Conference in London. Find out more here.

What’s it all about?

Climate Bonds latest analysis for 2017 shows a December 31^st tally of USD155.5bn, a new annual record, up 78% on the adjusted 2016 figure of USD87.2bn.

Green Bond Highlights 2017 report shows the US, China and France led the way accounting for 56% of issuance between them. Germany, Spain, Sweden, Netherlands, India, Mexico and Canada filled out the remaining Top Ten positions.

In the US, the largest overall issuer was Fannie Mae with a staggering USD24.9bn coming from its green Mortgage Backed Securities (MBS) programme – a volume so significant that it shifted the global market.

The big bonds of 2017

The largest single green bond placement originated from the Republic of France via its initial January 2017 for EUR7bn (USD7.6bn) issuance, part of its sovereign green bond program which ended the year at USD10.7bn following two subsequent taps.

Next largest cumulative bond issuers for the year were China Development Bank (USD4.6bn), the supranational European Investment Bank - EIB (USD4.6bn), and sub-sovereign New York MTA (USD4.2bn).

How to get to a $1tn Green Bond Market? Find answers at our Annual Conference-March 2018!

January 11, 2018, 4:00 pm

≫ Next: Germany’s DZ BANK is the latest to join the Climate Bonds Partner Program

≪ Previous: 2017 GB Issuance: USD155.5bn: New Record! All the 2017 numbers that count in our Green Bond Highlights report: Plus our Seven Super Trends and 2018 green bonds forecast!

From billions to trillions in green bonds sounds attractive. What will it take?

You’re invited to be part of the answers.

Green Bonds-Moving the market from billions to trillions

Climate Bonds 2018 Annual Conference in March is the centrepiece of a green finance week in London.

From the China Green Bonds Investor Forum to the first 2018 meeting of the European Green Securities Steering Committee, green bond market growth is ‘the’ agenda.

Plenaries and Parallel Sessions, the 2018 Green Bond Pioneer Awards and the Roundtables are where the big debates and discussions will take place on moving from billions to trillions and reaching the $1trillion milestone by the end of 2020.

How to get there by 2020? You’re part of the answers.

Participating, networking, making connections and taking opportunities. Helping create the momentum, investor confidence and deal flow needed to double and double again green bond issuance.

And joining your peers to celebrate the 3^rd annual Green Bond Pioneer Awards.

In 2017 we had international market actors, leaders, policymakers from over 40 nations together in London.

In 2018 we’re aiming for over 50 nations to be represented. We waived all registration fees for participants from emerging markets.

Join us in from 20th March in London

Conference details and the agenda are here .

We’ll have more to say and some high-profile speakers and sponsors to announce in the next few weeks.

Our Early Bird tickets are available ‘till January 31^st and our waiver for participants from emerging markets are in place.

Don’t miss out, register now.

The Last Word

We hope to see you in March.

In the meantime, if you have any questions or your organisation wants to support any of the conference sessions and events, please let us know, simply email serena.vento@climatebonds.net or manuel.adamini@climatebonds.net.

‘Till next time,

Climate Bonds

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Germany’s DZ BANK is the latest to join the Climate Bonds Partner Program

January 14, 2018, 4:00 pm

≫ Next: Chinese regulators introduce supervisory scheme for green bond verifiers - Further step in building market frameworks

≪ Previous: How to get to a $1tn Green Bond Market? Find answers at our Annual Conference-March 2018!

Germany’s second-largest bank by asset size DZ BANK becomes a Climate Bonds Partner: Herzlich Willkommen!

What’s it all about?

Germany’s second-largest bank in terms of assets, DZ BANK, joined the Climate Bonds Partner Program, joining forces to facilitate green bonds issuance and other green debt products to raise capital in line with Germany’s ambitious climate targets.

DZ BANK has started its green bond activities in 2013 and has since then expanded its scope to sustainable bonds in general, becoming a leading European underwriter.

DZ BANK is also one of Germany‘s most important financiers of renewable energy projects, with a financing volume of currently about EUR4bn. Via its Sustainable Investment Research arm, it has launched its own sustainability certificate for both bond and equity issuers (Seal of Quality for Sustainability).

In the European green bond market, Germany ranks second for issuance volume, totalling USD24.85bn (including other green finance instruments) to date. However, there are only 12 German issuers, the majority of which is made up of development, state-owned and commercial banks.

Who says what?

Sean Kidney, CEO, Climate Bonds Initiative

“We are proud to be joining forces with DZ BANK. They have been active in the green bond market and have shown deep commitment to support environmentally and socially responsible projects and markets, having a critical role facilitating deal flow.

German issuers have been some of the pioneers in the international green finance market, Germany is now the 5^th largest source of issuance globally and 2nd in Europe. But despite the country’s wide climate action implementation to date, Germany could be missing its 2020 goal of reducing emissions by 40%, if a more stringent climate agenda is not pursued.

This partnership will help promote sustainable investments and climate finance solutions in the largest populated country and strongest economy among the EU member states.”

Friedrich Luithlen, Head of Debt Capital Markets, DZ BANK

“We consider ‘green finance‘ part of our core business. Therefore, teaming up with the Climate Bonds Initiative is a great opportunity for DZ BANK to promote climate change action by facilitating green bond issuance. Green bonds across all asset classes play a key role for raising the private capital needed for the transition of the global economy into a more sustainable model.

As green bond issuance in markets such as the US, China or the Nordics has been speeding up rapidly over the past years, Germany has been slower at embracing Green Bonds. This is due to a more fragmented German investor universe. But it is changing rapidly. German green bond pioneers from the SSA sector such as KfW or NRW.Bank have paved the way. Recently, we have seen first benchmark transactions in the corporate sector.

2018 will be the year of several green and sustainable bond debut deals from corporates and financials in Germany, including promissory notes and covered bonds. Concurrently, ESG investor mandates are increasing both in number and in size. As Germany is committed to ambitious climate goals, we also expect municipalities and some of the German Laender to go green in the mid-term.”

The Last Word

We’re very glad to welcome DZ BANK to our network. Partners assist in developing climate finance solutions, market development committees and help define policy agendas for national, regional and sector based programs.

We’re sure their strong presence in the German market and expertise will be essential for us to promote and develop the green bonds market even further, enhancing national and regional climate investment, and emissions reduction plans.

Herzlich Willkommen, DZ BANK!

'Till next time,

Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

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Chinese regulators introduce supervisory scheme for green bond verifiers - Further step in building market frameworks

January 14, 2018, 4:00 pm

≫ Next: La emisión global de bonos verdes supera los USD 120 mil millones hasta Julio 2017

≪ Previous: Germany’s DZ BANK is the latest to join the Climate Bonds Partner Program

In late December, the People’s Bank of China (PBoC) and China Securities Regulatory Commission (CSRC) jointly released new guidelines for green bond verifiers and verification activities in China.

What's it all about?

In late December, the People’s Bank of China (PBoC) and China Securities Regulatory Commission (CSRC) jointly released new guidelines for green bond verifiers and verification activities in China.

The new guidelines will be under the supervision of a new ‘Green Bonds Standard Committee’, currently in the process of being set-up.

The “Green Bond Assessment and Verification Guidelines (Provisional)" introduce regulatory requirements for verifiers – essentially a verifier licencing scheme. They stipulate required qualifications and credentials, verification methods, and reporting requirements.

First time a regulator has ventured into supervising verifiers

This is the first time a government has developed regulatory supervision. The scheme is broadly modelled on the international Climate Bonds Standard & Certification Scheme.

Before they can undertake green bond reviews, verifiers in China will have to register with the Green Bonds Standard Committee and provide evidence of:

- Professional expertise in assurance, accounting and auditing

- Expertise in key qualifying sectors, such as clean energy and low-emission transport

- Having current professional liability insurance cover

- Established internal procedures, pricing structure and quality control

Verifiers will also be required to undertake ongoing training to remain competent.

The Green Bonds Standard Committee will be reviewing the practices of verifiers and sharing of the results through designated websites. This is unique to the Chinese market.

The Guidelines also require verifiers to ensure their independence: no economic interests or affiliations between verifiers and issuers are allowed. And verifiers should price their external review services “reasonably”; unfair pricing competition is prohibited.

Both pre-issuance and post-issuance verifications are required

To ensure verifications are carried out in an orderly and prudent manner, verifiers should follow either domestic or international standards recognized by the Green Bonds Standard Committee.

Another new requirement is that verifiers will now have to undertake both pre-issuance verification and post-issuance tracking (periodically in accordance with the bond tenor).

While verification at the post-issuance stage is not mandatory according to the Green Bond Principles (GBP), it is a requirement of the Climate Bonds Standard & Certification Scheme.

Recommendations on verification procedures and methods are included in the Guidelines, such as interviews and on-site appraisals. Verifiers should ensure that green projects funded by the bonds are compliant with regulations, and that the screening of green projects, decision-making processes, management system of proceeds as well as the information disclosure and reporting are complete.

Verifiers are obliged to gauge whether the expected environmental impacts of green projects are reasonable or not.

The guidelines specify that the time from the signing date of verification contract to the issue of verification report should be no less than 15 days.

Standardising verification reports

The Guidelines also standardise verification reports by setting up requirements on what should be reported and how.

The Guidelines also standardise reporting requirements for verifiers. A report should include:

the basic information of the green bond, including underlying assets and environmental impacts
a description of verification methods used
a summary report.

Verification reports will need to be made public to investors through designated websites or made available to specific investors as agreed.

Breaches of the regulations will attract penalties

Verifiers are required to conduct self-assessment of their green bond verification performance business once a year. The Green Bonds Standard Committee will have the power to make spot checks of verifier reports, as well as request peer reviews.

The Chinese regulators also say they intend to incorporate a penalty mechanism into the new rules, in the event of submission of false information, or a breach of professional ethics and independence requirements.

Under existing regulations, potential issuers have to first apply to a regulator for permission or have a programme of green bond issuance. They then issue a series of bonds against the programme, as they need and market conditions permit.

In future, whenever a verifier submits a post-issuance report with a “negative” conclusion, the bond issuer will have to take corrective action. If they fail to do so, their right to use the green label will be revoked for the remaining time to maturity and re-certification is not allowed. (This is similar to the revocation of Certification under the Climate Bonds Standard.)

They have also suggested that investors might want to start asking for a put option in the bond covenants, which they could exercise in a case of green label revocation (i.e. the issuer will have to buy back the bond if the green label is revoked).

Most stringent green bond rules in the world? Green Label Revocation

There has been a lot of international investor concern about the robustness of China’s green bond market. We discussed in our June 2017 post “Myth buster: why China’s green bond market is more orderly than you might think” the ongoing regulatory developments and structuring of China’s green bond market.

While there are still issues for international investors around the catalogue of qualifying assets and projects in China (notably “clean coal”), in terms of regulatory oversight it’s now the most comprehensive in the world.

This is a significant step and one worth watching as the market develops.

Tightening supervision on verifier quality is necessary

In China, the vast majority of green bond issuers receive third party external review, and this has become a norm - green bond issuance without verification would hardly be recognised by the market. But there have been some complaints about variations in the quality of verifications.

While 73% of verifiers operating in China are licensed verifiers under the international Climate Bonds Standard & Certification Scheme, their domestic verifications have not involved Certification to date and so have been unsupervised.

The move to tighten supervision on verifiers was foreshadowed in the recently published “Establishing China’s Green Financial System”, edited by Dr. Ma Jun, Special Advisor to the Central Bank’s Governor and Chairman of China's Green Finance Committee.

As implementation of the Guidelines proceed, market concern over “greenwashing” will increasingly be addressed and we expect international investors interest in China’s green bond market to grow.

The Last Word

Voluntary schemes have served the industry well, with the green bonds market continuing to grow rapidly.

But when governments start to introduce incentives for green bonds, whether for issuers or investors, regulatory oversight becomes essential.

That’s one of our super trends for 2018 towards a $1trillion a year market by 2020.

China has already introduced incentives such as fast-tracking approval processes for green versus other bonds. We expect other jurisdictions to follow suit in 2018;

The European Commission announced at the Macron Climate Change Summit last December that it’s looking into capital weighting incentives for green mortgage and vehicle bonds, and the European High Level Expert Group on Sustainable Finance has called for an EU wide approach to green standards and labelling.

With China and the EU stepping up their efforts, we expect attention to now turn to harmonisation between different national schemes.

'Till next time,

Climate Bonds

PS: Reminder: The 2018 China Green Bonds Investor Forum takes place at the London Stock Exchange Monday 19th March.

A joint CBI Euromony event that kicks off a week of green bonds activity in London including our Annual Conference and the 3rd Annual Green Bond Pioneer Awards. More information on our Conference site.

Dont miss it!

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La emisión global de bonos verdes supera los USD 120 mil millones hasta Julio 2017

January 16, 2018, 4:00 pm

≫ Next: December Market Blog: Nigeria issues 1st African Sovereign Green Bond & its Climate Bonds Certified! IRFC and PFC Certified from India: plus US, Swedish, Italian, German, Malaysian, Japanese and Chinese issuance and more!

≪ Previous: Chinese regulators introduce supervisory scheme for green bond verifiers - Further step in building market frameworks

La mayor parte de los recursos de los bonos verdes se destinó a proyectos de transporte limpio, seguido por los de energía renovable, construcción sustentable y eficiencia energética

El mercado global de bonos alineados al cambio climático alcanza ya $895 mil millones en circulación

El mercado internacional de bonos verdes marcó un nuevo record durante 2017, tal como lo señala el estudio “Bonos y Cambio Climático: El Estado del Mercado 2017 - Edición en Español” desarrollado por Climate Bonds Initiative por encargo de HSBC, mismo que presenta hoy MEXICO2, la plataforma de mercados ambientales de la Bolsa Mexicana de Valores.

El estudio cuantifica todos los bonos emitidos cuyos recursos son utilizados para financiar infraestructura resiliente y baja en carbono. En este reporte se analizan los bonos compatibles con una meta de 2 grados de calentamiento global, aumentando la rigurosidad del análisis en comparación con años anteriores. Se basa en las metas plasmadas en el Acuerdo de París que exige, hasta el momento, un flujo de inversiones bajas en carbono sin precedente.

La edición del reporte de 2017, la cual incluye todos los bonos alineados al cambio climático emitidos desde el 1 de enero de 2005 (año en que se ratificó el Protocolo de Kioto) hasta el 30 de junio de 2017, pone su foco en ciudades, con diez estudios que identifican las mejores prácticas en bonos verdes emitidos por ciudades, así como diversas oportunidades para nuevas emisiones en centros urbanos.

El mercado global de bonos alineados al cambio climático se posiciona en $895 mil millones, con un aumento de $201 mil millones en comparación con 2016. Se registran $138 mil millones en nuevos bonos de emisores existentes, con bonos en yuanes chinos encabezando la lista (32%), seguido por bonos denominados en dólares (26%) y euros (20%).

La mayoría de los proyectos financiados con bonos verdes están relacionados con transporte limpio (61%), seguidos por energía limpia (19%). Construcción, industria, agricultura, desechos y silvicultura comprenden sólo el 7%.

Alba Aguilar, directora de nuevos mercados de SIF ICAP, señala: “México contribuyó al crecimiento del mercado internacional en 2017 con 5 emisiones de bonos alineados con los ODS por un total de MXN 89,268 millones. Aun contamos con mucho potencial para llevar al mercado: nuestras ciudades enfrentan grandes riesgos en cambio climático, necesitan con urgencia desarrollar infraestructura resiliente y los bonos verdes son una herramienta fundamental para financiarla”.

Sean Kidney, director general de Climate Bonds, indicó “En 2017 alcanzamos números record en emisiones de bonos verdes, pero necesitamos más. Estamos solamente comenzando en finanzas verdes. Los bancos, corporaciones y gobiernos deben trabajar en conjunto con las ciudades para financiar infraestructura climática resiliente; es necesario alinear sus inversiones con las estrategias de cambio climático nacionales y regionales, logrando que las economías puedan enfrentar los impactos del cambio climático. Esto significa un vínculo con los Objetivos de Desarrollo Sustentable (ODS) de las Naciones Unidas como parte de esta transición vital”.

Descargar ahora.

Buena lectura,

Climate Bonds

Descargo de responsabilidad: la información contenida en esta comunicación no constituye asesoramiento de inversión en ninguna forma y la Climate Bonds Initiative no es un asesor de inversiones. Cualquier referencia a una organización financiera o producto de inversión es solo para fines informativos. Los enlaces a sitios web externos son solo para fines informativos.

La Climate Bonds Initiative no acepta responsabilidad por el contenido en sitios web externos. La Climate Bonds Initiative no respalda, recomienda o aconseja sobre los méritos o no de cualquier inversión o producto de inversión y ninguna información dentro de esta comunicación debe tomarse como tal, ni debe confiarse en la información de esta comunicación al tomar una decisión de inversión. La decisión de invertir en cualquier cosa es exclusivamente suya.

La Climate Bonds Initiative no acepta ninguna responsabilidad de ningún tipo, por cualquier inversión hecha por un individuo u organización, ni por ninguna inversión hecha por terceros en nombre de un individuo u organización, basada total o parcialmente en cualquier información contenida en este, o cualquier otra comunicación pública de la Climate Bonds Initiative.

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December Market Blog: Nigeria issues 1st African Sovereign Green Bond & its Climate Bonds Certified! IRFC and PFC Certified from India: plus US, Swedish, Italian, German, Malaysian, Japanese and Chinese issuance and more!

January 18, 2018, 4:00 pm

≫ Next: 2018 Conference Update: Early Bird Closes on Wed! New Speakers Confirmed! Join the debate on how to reach a $1tn market at #CBI18 in London on 20 - 21 March

≪ Previous: La emisión global de bonos verdes supera los USD 120 mil millones hasta Julio 2017

A December surge pushed 2017 issuance to a global recordof USD155.5bn - 40 issues, 12 from new issuers. Read more and scan our seven super trends for 2018.

And don’t forget the Climate Bonds Annual Conference and Green Bond Pioneer Awards. Early Bird tickets only until end of Jan. Details here.

New issuers

Issuer	Size	Verifier/Reviewer	Issuer Type	CBI Certified	CBI Analysis
Power Finance Corporation	USD400m	KPMG	Government-backed Entity	Yes	Link to analysis
Indian Railway Finance Corporation	USD500m	KPMG	Government-backed Entity	Yes	Link to analysis
Federal Government of Nigeria	NGN10.7bn	Moody's, DNV GL	Sovereign	Yes	Link to analysis
East Bay Regional Park District	USD74.6m	Moody’s	Local Government		Link to analysis
City of Malmö	SEK1.3bn	Sustainalytics	Local Government		Link to analysis
Ferrovie dello Stato Italiane SpA	EUR600m	Sustainalytics	Government-backed Entity		Link to analysis
Landesbank Baden-Wuerttemberg	EUR750m	Oekom	Government-backed Entity		Link to analysis
Permodalan Nasional Berhad	MYR1.9bn	No review	Government-backed Entity		Link to analysis
Berkshire Wind Power Cooperative	USD40.2m	No review	Government-backed Entity		Link to analysis
Toda Corporation	JPY10bn	Sustainalytics	Non-Financial Corporate		Link to analysis
Harvest Capital Management (Jiashi Capital)	CNY820m	Zhonfcai Lvrong	ABS		Link to analysis
TGOOD (Teruide)	CNY982.9m	CCXI	ABS		Link to analysis
Fannie Mae (REMIC)	USD764m	No review	ABS		Link to analysis
Fannie Mae (REMIC)	USD1.15bn	No review	ABS		Link to analysis
Fannie Mae (Green MBS)	USD24.9bn	No review	ABS		Link to analysis

Certified Climate Bonds

Federal Government of Nigeria – NGN10.7bn (USD29.7m)

The Federal Government of Nigeria’s sovereign Certified Climate Bond has multiple claims to fame. It is the first ever Certified sovereign green bond and the first African sovereign green bond. And the first Nigerian green bond. We announced these remarkable achievements in our blog last December, now let’s dive into some additional detail.

The bond has been Certified under the Climate Bonds Standard for Solar and Land Use Change Criteria. It will finance solar generation, contributing to the achievement of 13,000MW of off-grid PV, and afforestation projects.

The Certified Green Bond is the first offering of a wider NGN150bn (USD420m) green bond program. The wider eligible project categories outlined in the framework are:

Mitigation – energy efficiency, resource efficiency, improved electricity grid, renewable energy and clean technology
Adaptation – sustainable forest management

Nigeria’s sovereign green bond was awarded a GB1 (Excellent) Green Bond Assessment rating by Moody’s.

Well done Nigeria!

DNV GL provided the Assurance report.

Power Finance Corporation - USD400m

India’s state backed Power Finance Corporation (PFC) issued its debut green bond, which has been Certified under the Climate Bond Standard for Solar and Wind. The bond will contribute to the Indian Government’s plan of increasing renewable energy sources to 175GW by 2022, with 100GW coming from solar energy and 60GW from wind energy.

The USD400m, 10-year bond is listed on the London Stock Exchange. It marks PFC’s return to the international bond market after almost twenty years.

Nominated assets under the framework and eligible for future bonds are:

Renewable Energy – solar, wind, bioenergy, hydropower, geothermal, sea and ocean derived energy sources;
Energy distribution and management – transmission and grid infrastructure, smart systems and meters, heating management;
Energy storage – hydro storage systems, thermal heat storage, new technologies;
Energy efficiency technology and products as well as energy efficient processes and systems;
Cogeneration, tri-generation, combined heat and power;
Waste heat recovery;
Electrical Vehicles.

KPMG provided the Assurance report.

Underwriters: Barclays, SBI Securities, Standard Chartered.

Indian Railway Finance Corporation – USD500m

IRFC, the finance arm of the giant Indian Railways, became the 6^th largest Indian issuer when it closed its debut green bond and the issue helped India secure 9^th place in the 2017 Top Ten national rankings.

We commented on the bond in a previous blog and here’s some more details.

The USD500m green bond has been Certified under the Climate Bonds Standard for Low Carbon Transport.

Proceeds will finance eligible projects under its Dedicated Freight Railway Lines and Public Passenger Transport program.

KPMG provided the Assurance report.

Underwriters: Barclays, HSBC, MUFG Securities, Standard Chartered.

Local Government

East Bay Regional Park District - USD74.6m

East Bay Regional Park District’s inaugural USD74.6m green bond is one of four US muni deals in December 2017, which contributed to making California the second largest US state for sub-sovereign issuance in 2017.

Proceeds are expected to contribute to the following project categories:

Land acquisition to be included in parks owned and managed by the District or to create wildlife corridors;
Habitat protection to improve habits for plants and animals;
Trail development to create bicycle and pedestrian trails;
Sea level projects to improve the shore land to mitigate or adapt to rising sea-levels.

All project categories look – and we think are – pretty green.

Acquiring land to maintain its natural condition implies the avoidance of potential loss of sources of carbon sequestration, therefore preventing an increase in GHG emissions, which is great.

The development of bicycle and pedestrian infrastructure is an important factor that can contribute to the reduction of emissions from the transportation system, through an increased availability of low carbon transport modes which can create an incentive to reduce the use of cars and other high-emitting vehicles.

We haven’t seen a lot of sea level projects, but they essentially belong to the adaptation category and can produce clear environmental benefits by protecting habitats from sea level rise.

Moody’s assigned the bond a Green Bond Assessment of GB1 (Excellent).

Underwriters: Bank of America Merrill Lynch.

California’s pushing hard on green bonds, they were the first US state to reach USD5bn in green muni issuance in November last year and Treasurer Chiang is keeping up the momentum in 2018.

We have more to come on US green munis soon, so stay tuned.

City of Malmö - SEK1.3bn (USD153.2m)

Sweden’s City of Malmö’s SEK1.3bn debut green bond will finance eligible projects within the following categories:

Renewable Energy;
Energy Efficiency;
Clean Transportation;
Climate Change Adaptation;
Eligible Green and Energy Efficient Buildings based on the following criteria:
1. third-party certification standards such as Miljöbyggnad (Silver), BREEAM (BREEAM-SE Very Good, BREEAM in-use Very Good) or LEED (Gold); or
2. local schemes such as the Svanen Ecolabel or the Miljöbyggprogram (Grade B); or
3. the Swedish building norms BBR (Boverket Byggregler).

All eligible properties need to have at least 15% lower energy use per square meter than required by BBR.

Environmentally Sustainable Management of Living Natural Resources;
Pollution Prevention and Control;
Sustainable Water and Wastewater Management.

Projects related to pollution prevention and control will focus on removing chemicals, metals and other hazardous substances from the soil, while water and wastewater projects will aim at limiting the release of substances in coastal waters that cause eutrophication – the excessive build-up of nutrients in the water which leads to increased algae growth and oxygen depletion.

For green buildings, there are quite a few criteria listed in the framework, so let’s take a closer look.

High certification levels have been set for all three cited third-party certification standards. While LEED “Gold” is in compliance with our Taxonomy and Miljöbyggnad Silver is considered the norm in Sweden, aiming for even higher certification levels, such as Miljöbyggnad Gold and BREEAM “Excellent”, would have demonstrated an even greater commitment.

As for local programme schemes, Miljöbyggprogram is a self-assessment programme based on three certification levels, where “Grade B” is the second highest, while the Swanen Ecolabel is awarded when a certain threshold is passed, which can vary by building type.

In their second party opinion, Sustainalytics states that both local programme requirements are comparable to the third-party certification standard levels and that the 15% higher energy efficiency requirements compared to the Swedish building norms will also lead to significant energy savings.

Sustainalytics provided the second opinion.

Underwriters: Handelsbanken.

Government-backed Entities

Ferrovie dello Stato Italiane SpA - EUR600m (USD713.9m)

The EUR600m green bond places FS Italiane as Italy’s second largest issuer to date, contributing to securing the country’s 12^th place in global rankings for 2017. Demand exceeded EUR1.3bn, with offers from 115 investors of which more than 60% international.

Use of proceeds will be allocated to renewing the company’s Public Transport Rolling Stock through the following eligible projects:

New Electric Multiple Unit trains for regional passenger transport;
New High-Speed Trains “ETR 1000”.

Both projects comply with our Low Carbon Transport Taxonomy, and so are easily identifiable as green. Investing in rail infrastructure, especially long distance trains, will be a key contributing factor in reducing GHG emissions from transportation. Good rail networks incentivise use, while higher passenger capacity magnifies the impact of lower emissions compared to planes and ICE cars and vehicles.

Sustainalytics provided the second opinion.

Underwriters: Crédit Agricole CIB and HSBC acted as Joint Structuring Green Advisors. Banca IMI, Barclays, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan and SG CIB, acted as Joint Lead Managers and Joint Bookrunners.

Landesbank Baden-Wuerttemberg – EUR750m (USD884.4m)

With its first green bond of EUR750m, Landesbank Baden-Wuerttemberg joins a pool of 13 German issuers to date becoming the largest green bond from a German bank, bar development bank KfW. The bond also achieved the tightest spread amongst all German senior unsecured bonds, underlining high investor interest.

Proceeds will be allocated to the following eligible projects:

Renewable Energy:
- Onshore and offshore wind;
- Solar;
- Connection infrastructure from renewables to grid and network transportation.
Green Buildings:
- New and existing buildings which are in the top 15% of low carbon buildings in Germany;
- Refurbished buildings in Germany, which have undergone major refurbishments since 2007 under the German energy savings ordinance (EnEV) and which can demonstrate energy consumption that is no more than 40% higher than that of a comparable new building;
- New, existing and refurbished buildings which have been awarded at least a LEED “Silver”, DGNB “Silver”, BREEAM “Very Good”, ENERGY STAR “70” or equivalent level of certification.

Let’s start with the easy part: both renewable energy projects and the related infrastructure used to connect renewables to the grid are green, no red lights so far.

Moving on to green buildings, a top 15% performance threshold of low carbon buildings in Germany is a very good effort level. However, a 40% upper-limit for additional energy consumption in refurbished buildings compared to new buildings does not look particularly stringent. To better assess this requirement, it would be useful to know which standard(s) would apply to comparable new buildings.

As for Green Building certifications, setting standards is good practice and we note that setting all certification levels at the market’s best practice threshold (LEED “Gold”, for instance) would show an even greater commitment.

Oekom provided the second opinion.

Underwriters: ABN AMRO.

Permodalan Nasional Berhad – MYR1.87bn (USD461m)

Malaysian PNB issued their maiden green sukuk of MYR1.87bn last December. Proceeds will finance a range of sustainable features for the Merdeka PNB118 Tower, a 118-storey building aiming to secure LEED certification. The eligible projects mentioned under the green sukuk framework include connections to mass public transport, more water efficient equipment as well as minimum levels of locally sourced and recycled building material.

It is great to see another green sukuk coming to market. While the framework states that the building is aiming to obtain a LEED 2009 Core and Shell certification, it does not specify the tier (Certified, Silver, Gold or Platinum). It also affirms that by seeking a mix of certification schemes – LEED 2009 Core and Shell, Green Building Index and GreenRe– the project will have a “more comprehensive cross section of green features than if using only one certification system”.

Assessing more aspects of the construction and use can provide complementary information. What we would really love to see is an ambition level attached to each certification.

No external review.

Underwriters: MIDF Amanah Investment Bank.

Berkshire Wind Power Cooperative - USD40.2m

Berkshire Wind Power Cooperative issued their USD40.2m debut green bond to refinance the cost of acquisition and construction of the Berkshire Wind Power Project, a 15MW onshore wind farm located in Massachusetts Brodie Mountain.

No external review.

Underwriters: Piper Jaffray & Co.

Non-Financial Corporate

Toda Corp – JPY10bn (USD88m)

With its first green bond of JPY10bn, Toda Corporation brings the total number of Japanese issuers to 9. Proceeds will fund the construction of an offshore wind farm, located near Goto City, Japan, with expenditures including wind turbines, floating bodies and grid connections.

Offshore wind is as green as it gets – well done Toda Corp!

Sustainalytics provided the second opinion.

Underwriters: Mitsubishi, Mizuho, SMBC Nikko Securities.

Asset Backed Securities (ABS)

Harvest Capital Management (Jiashi Capital) – RMB820m (USD127m)

Harvest Capital’s RMB820m deal is the first of its kind in China: a green ABS backed by a commercial real estate mortgage loanCMBS. The underlying asset is an office building owned by China Energy Conservation and Environmental Protection Group (CECEP).

The property has received both LEED Gold certificate and China Green Building Label (GBL) two-star certificate for a variety of green technologies that have been used, including intelligent lighting control system, water reuse and rainwater recycling appliances, electric car chargers, and others.

The CMBS was issued in 3 tranches, the RMB 500mn Senior A class has a coupon of 5.20%, while the Senior B tranche (RMB 279mn) has a coupon of 5.33%, both are AAA rated. All tranches are listed on Shenzhen Stock Exchange.

Zhongcai Lvrong provided a second opinion.

Underwriters: CITIC Securities.

TGOOD (Teruide) – RMB983m (USD153m)

The company is a Chinese producer of prefabricated substations and Electric Vehicle (EV) Charging Systems. Its inaugural green ABS is backed by receivables generated from electric car charging stations, installed in cities across China. Although limited disclosure is available, we included this green ABS because EV charging systems are necessary infrastructure, critical to wide EV adoption.

This green ABS includes 4 tranches with a maturity of 2.8 years. The RMB542m senior AAA rated tranche has a coupon of 6%.

CCXI provided a second opinion.

Fannie Mae GeMS REMIC – USD764m and USD1.15bn +

Fannie Mae Green MBS – USD24.9bn (2017)

In November and December, US Agency Fannie Mae issued two further deals under its GeMS Real Estate Mortgage Investment Conduit (REMIC) program.

FNA 2017-M13 includes two tranches (A1 and A2) secured entirely on green collateral comprising USD734m Green Rewards mortgages and USD30m mortgages on Green Building Certified Property.
FNA 2017-M15 includes four tranches (ATS1, ATS2, A1 and A2) secured on green collateral comprising USD365m Green Rewards mortgages and USD782m mortgages on Green Building Certified Property.

Green Building Certified Property and Green Rewards are part of Fannie Mae’s Multifamily Green Initiative. The program is for multifamily housing (aka apartment buildings) and offers more attractive loan terms to borrowers who provide certified* energy efficient buildings as collateral or will use the debt to make energy or water efficiency improvements.

Under the Green Rewards program, the funds must be invested within 12 months to make property improvements, which target 25% or more reduction in annual energy or water use. Fannie Mae covers the cost of an Energy and Water Audit Report at origination, and the borrower commits to report on the property’s annual energy performance metrics, including Energy Star score. So far so good …

Under the Green Building Certified Property program, Fannie Mae accepts a large number of programs. Some of them are local, others national and most are based on or incorporate Energy Star metrics. Here’s the list*:

We applaud the multifamily landlords for getting their buildings certified! And the lenders who originated the green mortgages! That’s quite an achievement.

But as we’ve noted on previous occasions we quite like to see thresholds and ideally a high ambition level attached to each building certification standard. We would hope that as Fannie Mae continues its journey as a supporter of green finance, the green credentials of the underlying property collateral will exceed the minimum thresholds and/or the agency will raise the bar.

But let’s take a step back to provide some background on the why’s and how’s of including the Fannie Mae bonds in our green bonds database.

Fannie Mae is a government-backed agency, set up to facilitate lending on housing across the US. Here’s how it works:

Lenders across the USA originate mortgages. The lenders then sell loan pools to Fannie Mae to free up lending capacity, so they can originate new mortgages.
When Fannie Mae purchases the loan pools, it structures MBS deals, essentially a bond transaction secured on mortgage loans. If the underlying mortgage loans qualify under the Multifamily Green Initiative, these are labelled Green MBS. It is these Green MBS that we include in our green bond tallies.
Fannie Mae sells the Green MBS – and other MBS – to investors.
(optional). Fannie Mae may decide to purchase or retain some of the Green MBS and repackage them into GeMS REMICs. These deals may be backed entirely by green collateral – this was the case with FNA 2017-M10, issued last August. More often they feature some tranches secured on green collateral, and some that are not and we started tracking these deals from the very first one in February 2017: FNA 2017-M2.

We only track REMIC tranches backed by mortgages under the Green Initiative. Also, to avoid double counting, we won’t be including these in our green bond tallies but will be providing ongoing coverage.

The Green Initiative was launched in 2011 but Fannie Mae really stepped up issuance only over the last two years. In 2016 it issued USD3.5bn of Green MBS. The final 2017 figures is not available just yet, but as of the end of November it had issued 1043 Green MBS deals totalling USD24.9bn. MBS secured on Green Rewards loans account for USD18.6bn with the remaining USD6.3bn secured on Green Building Certified Property.

Historically, Fannie Mae didn’t label the MBS which were backed by green collateral pools so there was no easy way of identifying which were green and which were not. However, it has now labelled all of it as Green MBS. It also created a dedicated web page, providing much needed visibility.

The labelling and disclosure mean we can now track Green MBS. More importantly, the greater visibility and regular (at least monthly!) issuance of Agency MBS has huge potential to spur property-backed green bond volumes. And that would be wonderful!

Previously Pending

Fingrid - EUR100m (USD117.5m)

Fingrid’s EUR100m green bond was issued to finance energy efficiency projects related to the development of transmission networks comprising renewable energy connections to the grid and transmission infrastructure upgrades.

If you made it deep into Part 2 of our huge November Market Blog you’ll recollect we’d decided to leave this bond pending until specific project information regarding the degree of grid energy efficiency gains were disclosed.

Additional information provided by the issuer shows that eligible transmission line projects will aim at reducing network losses in a range between 60% and 85%, which demonstrate significant efforts.

We are therefore pleased to announce that Fingrid’s bond has now been included in our green bond database.

Repeat Issuers

Issuer	Size	Verifier/Reviewer	Issuer Type	CBI Certified	CBI Analysis
Agricultural Bank of China	CNY1.4bn	KPMG and China Bond Rating	ABS		October 26^th 2015 Market Blog
Akuo Energy	EUR60m	No review	Non-Financial Corporate		August 2^nd 2016 Market Blog
Bank of Beijing	CNY15bn	EY	Financial Corporate		April 27th 2017 Market Blog
China Development Bank	CNY5bn (tap)	PwC	Development Bank		December 11^th 2017 Market Blog
Credit Agricole CIB	BRL5.8m	Sustainalytics	Financial Corporate		November 22nd 2016 Market Blog
GCL New Energy Investment	CNY560m	None	Non-Financial Corporate		September 1^st 2017 Market Blog
IFC	SEK200m	CICERO	Development Bank		August 14th 2015 Market Blog
Iowa Finance Authority	USD347.5m	No review	Local Government		November 1^st 2017 Market Blog
Massachusetts Development Finance Agency	USD43.5m	No review	Government-backed Entity		June 17^th 2016 Market Blog
Midpeninsula Regional Open Space District	USD25m	No review	Local Government		August 25^th 2016 Market Blog
New York MTA	USD2.2bn	Sustainalytics	Local Government	Yes	Link to Blog
Neoen	EUR245m	Vigeo Eiris	Non-Financial Corporate		November 16th 2015 Market Blog
Orebro Kommun	SEK500m	CICERO	Local Government		October 13^th 2016 Market Blog
Province of La Rioja, Argentina	USD100m	S&P	Local Government		March 15^th 2017 Market Blog
Renovate America/ Hero Funding	USD298.3m	Sustainalytics	ABS		February 26th 2016 Market blog
Republic of France	EUR1.1bn (tap)	Vigeo Eiris	Sovereign		Link to Blog
San Francisco Bay Area Rapid Transit (BART)	USD185.5m	First Environment	Local Government	Yes	June 9^th 2017 Market Blog
San Francisco Public Utilities	USD121.1m	Sustainalytics	Local Government	Yes	Link to Blog
San Francisco Public Utilities	USD384.6m	Sustainalytics	Local Government	Yes	Link to Blog
Tesla Energy (SolarCity)	USD230.9m	None	ABS		Link to Blog
Tesla Energy (SolarCity)	USD130.9m	None	ABS		Link to Blog

Green Bond Gossip & News Bites

SpareBank 1 Boligkreditt set for first Nordic green covered bond.

Poland’s Finance Ministry confirms the country’s intention to issue a second sovereign green bond in Q1 2018.

Mexico’sClimate Finance Advisory Group (CCFC) released the ‘Green Bond Principles MX’ (in Spanish) green bond guidelines.

Hong Kong Monetary Authority (HKMA) and the International Capital Market Association (ICMA) to co-host Green and Social Bond Principles Annual General Meeting and Conference in June.

India International Exchange (India Inx) listed IRFC’s inaugural green bond on its global securities market.

Nasdaq to launch Nasdaq First North Sustainable Bond Market to meet increased green bond demand.

Events

In Santa Monica in late February? Don’t miss our Justine Leigh Bell speaking at the California Treasurer’s Green Bonds Symposium. It’s a 2 day event organised with the Milken Institute and Environmental Finance.

There’s big things ahead for the green muni bond market in 2018. This event is just the beginning.

Moving Pictures

Take a quick look at our 2017 Highlights clip. 1:14secs.

You can watch our Seven Super Trends for 2018 on our YouTube channel.

P.S: Have you already registered for the Climate Bonds Annual Conference 20^th-21^st March? Special early bird offer available until the 31^st January – Register now!

‘Till next time,

Climate Bonds

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2018 Conference Update: Early Bird Closes on Wed! New Speakers Confirmed! Join the debate on how to reach a $1tn market at #CBI18 in London on 20 - 21 March

January 24, 2018, 4:00 pm

≫ Next: Record USD11bn US Green Muni Bonds 2017: NY in top spot, beats California: USD20bn for 2018 forecast

≪ Previous: December Market Blog: Nigeria issues 1st African Sovereign Green Bond & its Climate Bonds Certified! IRFC and PFC Certified from India: plus US, Swedish, Italian, German, Malaysian, Japanese and Chinese issuance and more!

Just seven weeks ‘till our Annual Conference and 3^rd Annual Green Bond Pioneer Awards.

Early Bird open until Wed 31^st Jan. Plus, special rate for NGOs and waiver for participants from emerging economies. Don’t miss it!

“From billions to trillions” is the theme during the greenest week London has ever seen so far.

Climate Bonds Annual Conference week includes the China Green Bonds Investor Forum, the 3^rd annual Green Bond Pioneer Awards and the opening meeting of the European Green Securities Steering Committee. All part of this year’s green finance growth agenda.

Here’s some of the speakers who will lead the discussion

ALZBETA KLEIN

Director and Global Head

International Finance Corporation (IFC), Climate Business

Leading all work related to renewables, climate-smart agriculture, green bonds and other climate business areas at IFC, Ms Klein coordinates a portfolio that is now over $60 billion, comprising investments in some 1,800 companies worldwide. With a master’s degree in Economics, during the past 20 years she has worked in many areas of IFC including serving for two years as the Chief of Staff to IFC’s former CEO Mr. Lars Thunell.

DR. MA JUN*

Director

Center for Finance and Development, Tsinghua National Institute of Financial Research

Dr. Ma has led Chinese and international green finance initiatives in the past few years, including China’s Green Finance Guidelines, the first comprehensive policy framework for green finance in the world. Dr. Ma is also Special Advisor to the Governor of the People’s Bank of China, Chairman of Green Finance Committee of China Society for Finance and Banking, and Co-chair of G20 Green Finance Study Group (GFSG).

RATHIN ROY

Director

National Institute of Public Finance and Policy, India

Rathin Roy took charge as Director NIPFP in May 2013. Prior to that, he has worked in over 80 countries and is a global figure in the world of applied macroeconomic and fiscal policy. He holds a PhD in Economics and an MPhil from the University of Cambridge, Post-PhD, was tenured in the Economics Faculty at the School of Oriental and African Studies (SOAS), University of London, and is an Economist with the Institute for Development Policy and Management, University of Manchester.

CHRISSA PAGITSAS

Director

Fannie Mae Multifamily’s Green Financing Business

Under Ms Pagitsas leadership, the Green Financing Business’ portfolio has grown to over $15bn in through Q2 2017. She is responsible for creating market transforming innovations in the financing industry such creating the Green MBS, launching mortgage loan products that finance green building certified properties and energy/water efficient investments and determining how to integrate green cost savings into conventional mortgage underwriting. Ms. Pagitsas holds an MBA from the Darden School of Business, University of Virginia and a BA from Johns Hopkins University.

ULRICH BOGNER

Director, Corporate Finance and Investments

Strasser Capital, Germany

Mr. Bogner is responsible for structuring the financing of companies in the Strasser Capital portfolio and managing M&A transactions. He holds a Master of Science from the University of Oxford in Law and Finance and studied Business Law in Vienna. Mr. Bogner has been certified as Senior Accountant by the German Institute for Certification in Accounting. A recipient in the 2017 Green Bond Pioneer Awards, Strasser Capital is a leading European private equity firm.

The Last Word

We love a challenge. From billions to trillions in green bonds sounds like a good one. Are you on board?

Conference details and the agenda are here. There’s more speakers and agenda announcements to come.

Don’t miss out, register now and enjoy our Early Bird tickets! And in the meantime, watch our video on the Green Bonds Super 7 Trends for 2018.

‘Till next time,

Climate Bonds

*P.S.: We had an editorial error in a previous version of this blog. We identified it and immediately corrected before all the newsletters were sent out. We deeply apologise to our good friend Dr. MA Jun (and the noted environmentalist Ma Jun) for our mishap.

P.S.: If you have any questions or your organization wants to support any of the conference sessions and events, please reach out to serena.vento@climatebonds.net or manuel.adamini@climatebonds.net.

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Record USD11bn US Green Muni Bonds 2017: NY in top spot, beats California: USD20bn for 2018 forecast

January 29, 2018, 4:00 pm

≫ Next: Just out: EU High-Level Expert Group on Sustainable Finance (HLEG) final report

≪ Previous: 2018 Conference Update: Early Bird Closes on Wed! New Speakers Confirmed! Join the debate on how to reach a $1tn market at #CBI18 in London on 20 - 21 March

USD11.05bn in green muni issuance in 2017: Contributes 26% of US USD42.2bn total green bonds for the year

New York and California vie for No1 spot amongst top 10 states. NY wins!

Forecast for 2018 is USD20bn as US states & cities link climate action and investment

New Green Muni Record

Annual US green municipal bond issuance reached a new record in 2017, passing the symbolic USD10bn mark. New York retook the lead from California and ended the year with bragging rights as the US state with the highest issuance of municipal green bonds during the year, and the highest cumulative issuance to date.

Climate Bonds Initiative is forecasting $20bn of green municipal issuance in 2018 as US cities and states ramp up climate action.

Our latest analysis of US muni issuance finds the total on December 31^st stood at an annual record of USD11.05bn, up from USD7.11bn in 2016. New York has the highest 2017 total at USD4.49bn, and California followed with USD4.32bn for the year.

Internationally, our Climate Bonds 2017 Highlights report shows a whopping USD155.5bn in green bonds were issued in 2017 with the US leading the global Top 10 at USD42.4bn, almost double that of China (USD22.5bn) and France (USD22.1bn), in second and third place respectively.

At USD11.05bn green municipal bonds comprise 26% of the 2017 US total muni issuance.

New York MTA a world scale issuer

A December, a USD2.17bn issuance confirmed the NY Metropolitan Transportation Authority (MTA) as the leading municipal green issuer to date, and was the sixth largest green bond issued globally during 2017.

Repeat green issuance from MTA totalling USD5.52bn (Climate Bonds Certified via our streamlined Programmatic option for ongoing issuers) helped New York regain first place over California.

Other notable issuance in 2017 included California Health Facilities Financing Authority, Massachusetts Water Resources Authority, State of Connecticut, Iowa Finance Authority, San Francisco BART, San Francisco PUC and New York State Finance Housing Authority.

You can find the full table here.

Water and Rail/Urban Transit dominate

Sustainable water management reached a cumulative total of $9.22bn at the end of 2017, raising over $3bn in the last two years.

Helped by smaller bond issuances in California, the transport sector has come close to passing sustainable water as the largest overall segment of municipal green bonds with more than $8.54bn cumulative issuance into the market. $5.39bn of this was issued in 2017 alone, more than double the $2.08bn issuance of 2016.

65% of the projects financing low carbon transportation come from New York, 16% from Washington and 15% from California.

Who’s saying what?

Patrick McCoy Director of Finance, New York MTA

“Everything the MTA does to operate an efficient public transportation system helps reduce the amount of carbon emitted into the atmosphere. CBI Certification provides a form of recognition for the sustainability embodied by operating our transportation network, and CBI Certified MTA bonds are a vital tool for its capital investment.”

Justine Leigh-Bell Director of Market Development Climate Bonds Initiative

“It is encouraging to see US cities and states making strong commitments to implement their own climate action plans in light of Washington’s retreat from the Paris Agreement. This will lead to a growing interest in leveraging green bonds as a valuable tool for States and cities to finance their climate strategies. Climate action plans will increasingly be connected debt capital raising strategies and infrastructure investment.”

“The US continues to lead the way globally in green muni bond issuance. The next stage is to effectively link this new wave of green finance to real and measurable impacts.”

“More than 10 new US municipalities entered the green muni market in 2017. We expect this trend to sharpen as institutional investors increasingly seek green investment products for their portfolios."

“New York and California have been leading issuers of green bonds, notably in key sectors such as water and transport.”

“We expect we will see more examples of these types of investments following the State Treasurer’s February Green Bonds Symposium and Governor Brown’s September Global Climate Action Summit. California will look to position itself as the State paving the way on US climate action and working to stimulate sub national green issuance.

Flashback! 2013: Massachusetts was first to move

Massachusetts was the first state to enter the green muni market in 2013 with a USD100m green bond. Issuance in New York and California started in 2014, the first CA issuer being California State (USD300m) and the first NY issuer, New York State Environmental Facilities raising USD213.6m.

Examples of significant US municipal issuers to date include the Central Puget Sound Transit Authority who have raised USD1.34bn, Massachusetts Water Resources Authority with USD1.04bn, San Francisco Public Utilities Commission USD1.04bn and California Health Facilities Financing Authority USD983.4m.

Overall Muni Top Ten

After the big two, Massachusetts, Washington, Connecticut, Iowa, Indiana, Colorado, District of Columbia, and Illinois filled out the remaining Top Ten states for total cumulative issuance from 2013 to December 31^st.

Despite its smaller size, Massachusetts has maintained its position in the top three as the market has accelerated in the last two years.

The Last Word

USD20bn forecast for 2018

Climate Bonds is forecasting green municipal issuance to almost double in 2018 and reach USD20bn.

Drivers of growth will include:
City and state based climate leadership
Increasing emphasis on infrastructure spending and the need for need climate aligned infrastructure.

Increasing institutional investor demand for green and ESG based investments. Other sub national based climate actions will also have an impact. The two-day California Green Bond Symposium on Feb 27-28 convened by State Treasurer John Chiang is sure to have a ripple effect.

If you can make it to Santa Monica next month, don’t miss Our Director of Markets Justine Leigh-Bell on the agenda.

Who will win in 2018? More green muni bonds are on the way, the race for 2018’s top spot is well and truly on!

‘Till next time,

Climate Bonds

P.S.: Top 10 US Municipal Green Bond Issuers cumulative total and rank table here.

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↧

Just out: EU High-Level Expert Group on Sustainable Finance (HLEG) final report

January 30, 2018, 4:00 pm

≫ Next: February Events: From Stockholm, to Amsterdam, Helsinki, Delhi, Brasilia, Santa Monica, Kuala Lumpur & many more!

≪ Previous: Record USD11bn US Green Muni Bonds 2017: NY in top spot, beats California: USD20bn for 2018 forecast

2020 Sustainability Taxonomy to guide green investment decisions, an official EU Green Bond Label and Standard and a new Sustainable Infrastructure body amongst major recommendations

Impetus now for EU Action Plan to help driving economic directions and climate action via green finance and sustainable investment

What’s it all about?

The EU High-Level Expert Group on Sustainable Finance (HLEG) has just released their long awaited final report “Financing a Sustainable European Economy”.

After a year of work, an interim report released last July and extensive public consultation, the final recommendations from the Expert Group have been released; they will form the basis for the Commission’s upcoming Action Plan on Sustainable Finance, to be announced on March 22^nd. CEO Sean Kidney is one of the members of the expert group.

The roadmap covers both how to move capital flows towards sustainable investments and how to address sustainability risks in the financial system. Building on progress in several sub-sets of sustainable finance this is the first time the issue has been investigated so comprehensively.

EU-wide actions on sustainable finance have global implications, and HLEG is setting a precedent for other countries to follow.

What does the report cover?

Recommendations are grouped into priority actions, cross-cutting actions and actions specific to financial institutions and other sectors of the financial system.

Priority actions for the Commission are to:

Introduce a common sustainable finance taxonomy, starting with climate change
Clarify investor duties to extend the time horizons of investment and bring greater focus on environmental, social and governance (ESG) factors
Upgrade disclosure rules to make sustainability opportunities and risks fully transparent
Empower and connect citizens with sustainable finance opportunities
Develop official European sustainable finance standards, starting with green bonds
Establish a ‘Sustainable Infrastructure Europe’ to expand the size and quality of the EU pipeline of sustainable assets
Reform governance and leadership of companies to build sustainable finance competencies
Enlarge the role and capabilities of the European Supervisory Authorities to promote sustainable finance as part of their mandates

Cross-cutting recommendations include:

Establishing a EU observatory on sustainable finance to track progress on sustainable finance
Investigating alternative accounting approaches to current practices for long-term investment portfolios
Examining the impact of energy efficiency on underlying asset values and financial risk management
Developing ‘Sustainable Finance Compacts’ with key countries to promote sustainable finance policy reform at the international level

The three recommendations most central to green bond market growth:

1. Sustainable Finance Taxonomy

The HLEG’s effort is the first attempt at the European level to provide a shared EU classification of sustainable activities that is applicable to all types of assets and capital allocation including project finance, bonds and equity.

The Taxonomy is set to include assets that address climate change, environmental and social sustainability. Already in this report some screening criteria for climate change assets are proposed, with a view to develop a full taxonomy by 2020 through the establishment of a dedicated Technical Working Committee with public and private representatives.

The link with SDGs

This Taxonomy is particularly relevant in a market where both social and Sustainable Development Goals (SDG)-bonds are on the rise, and will serve to guide both issuers and investors around green, social and sustainable investments.

We’ve noted the increasing links between green bonds and the SDG goals, particularly as a source of finance for a sub-set of the goals (6,7,9,11,13 and 15).

Stay tuned for more discussion on this topic at our annual conference in late March and in an upcoming blog post where we’ll dive into how green bond investments, wider climate issues and SDGs fit together.

2. EU sustainable finance standards, starting with green bonds

The HLEG recommends the Commission introduce an official EU Green Bond Standard, with mandatory requirements around disclosure on allocation of proceeds, reporting and external reviews. The eligibility of green projects would be determined by the criteria established in the Sustainable Finance Taxonomy.

The HLEG also recommends developing accreditation criteria for external review providers and considering an EU Green Bond label to confirm alignment with the Standard – this is essentially the model of the Climate Bonds Standard & Certification scheme.

3. Sustainable Infrastructure Europe

The development of a pipeline of investable assets that meet sustainability requirements remains a challenge. To overcome bottlenecks, particularly limited project development capacity in areas of sustainable investment such as renewable energy and low-carbon transport, the HLEG recommends the establishment of Sustainable Infrastructure Europe – an entity built on existing institutions and designed to accelerate the development of high-quality infrastructure projects.

Ensuring a pipeline of projects is the basis of any green bond market or green finance roadmap – it is essential to enable the financial system to reallocate capital flows to sustainable assets and mitigate sustainability risks to financial stability.

Amongst the cross-cutting themes we expect to see action in the short-term in particular on energy efficiency investments and international ‘Sustainable Finance Compacts’.

The Compacts are an opportunity for Europe to shape sustainable finance reforms globally and consolidate EU leadership on climate action and investment at the international level.

Sean Kidney Climate Bonds CEO & Expert Group Member:

“The HLEG initiative from the Commission has been an incredible success and has been much more broadly applauded and welcomed than anticipated. The range of recommendations and proposals can make a substantial difference in ensuring the financial system supports the achievement of sustainability goals and environmental action.”

“These recommendations provide new foundations for a sustainable economy and not just for Europe but also for the world.”

Now to the European Commission’s Action Plan

We are now looking to the release of the European Commission’s Action Plan on Sustainable Finance on the back of the HLEG’s recommendations, expected on March 22.

In a recent speech at President Macron's One Planet Summit*, Vice-President Dombrovskis has already welcomed some of the HLEG’s recommendations, particularly noting the importance of a common EU sustainable finance taxonomy and the need to integrate sustainability factors into investment mandates.

We expect these to be taken forward in 2018.

The Commissioner has also been vocal about amending capital charges for banks through a green supporting factor, but this is expected to take longer to be implemented: The HLEG highlights the need for further evidence of the lower risk profile of green investments; in particular, banks would need to upgrade their assessment methodologies of material financial and non-financial risks by using forward-looking analysis that include and adequately weigh ESG-related risks.

Look out for a dedicated European session on the second day of our Annual Conference, March 20. Register here – Early Bird discounts end today!

The Last Word

The HLEG has overcome some initial skepticism and generated a huge amount of interest. The basic components, broad based representation from finance and civil society (including our own CEO Sean Kidney) and a focused 12+ month time frame has kept onlookers engaged in the process.

There’s also been a wider effect. The UK Government announced a Green Finance Task Force in September 2017. Canadian expatriates initially took up issue in August and domestic financial institutions subsequently have clubbed together writing to the federal government seeking a local equivalent.

In time we can see other nations adopting similar processes.

The EU can now make a jump on regulatory frameworks for green and sustainable investment, further harness the investment capabilities of its mature financial system, the patient capital of pension funds and mainstream green finance.

In the growing global climate race, this HLEG report provides a handy springboard.

Like many others, we now await the Action Plan.

‘Till next time

Climate Bonds.

*Note: In a previous version of this blog we included another event name, the corrected event is the One Planet Summit.

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February Events: From Stockholm, to Amsterdam, Helsinki, Delhi, Brasilia, Santa Monica, Kuala Lumpur & many more!

January 31, 2018, 4:00 pm

≫ Next: Underwriter League Tables for 2017: BAML tops both Q4 & the full year: Crédit Agricole & HSBC 2nd & 3rd - full figures and data

≪ Previous: Just out: EU High-Level Expert Group on Sustainable Finance (HLEG) final report

This month we’re flying across Europe, Asia and the Americas. We’ll start with the hot temperatures of Brasília, we'll make a stop in wintery Stockholm & Helsinki with an interlude in the wet season of Kuala Lumpur.

Last but not least, Justine Leigh-Bell will join the California State Treasurer’s Green Bonds Symposium on the shores of the Pacific Ocean.

Meet Neha in Delhi, Anna in London, Sean in Kuala Lumpur and Justine in Santa Monica. We are always happy to talk to green bond aficionados!

When?	Where?	Who?	What?
28^th– 30^th January	Delhi	Neha Kumar	Participating in the Second China-India Dialogue convened by ICRIER and Tsinghua University, supported by NCE
31^st January	Madrid	Sean Kidney	Addressing IE Business School
1^st February	Brasília	Thatyanne Gasparotto	Speaking at “Agro em questão – Financiamento para o Agronegócio”, a seminar on challenges of financing for the agricultural sector, with the Confederação da Agricultura e Pecuária do Brasil (CNA)
2^nd February	Brussels	Sean Kidney	Participating in European Commission Sustainable Finance HLEG meeting
3^rd February	Delhi	Neha Kumar	Participating in Second Roundtable on “Sustainable and Energy Efficient Affordable Housing in India”, with NIUA, SSEF and SDC
5^th February	London	Anna Creed	Presenting on “Innovation in hydropower financing” organised by IHA
5^th February	Jakarta	Sean Kidney	Participating in green bonds roundtable hosted by Indonesian Ministry of National Development Planning
5^th February	Jakarta	Sean Kidney	Partnership Agreement ceremony with the Indonesia Stock Exchange
6^th February	Kuala Lumpur	Sean Kidney	Addressing a World Bank Research Seminar in the World Bank offices
7^th February	Kuala Lumpur	Sean Kidney	Moderating discussion on “Aligning Values with Investment” at the World Capital Markets Symposium 2018
8^th February	Hong Kong	Sean Kidney	Speaking at launch of “China Green Bonds 2017” report, jointly prepared with CCDC, sponsored by HSBC
9^th February	Beijing	Sean Kidney	Speaking at launch of “China Green Bonds 2017” report, jointly prepared with CCDC, sponsored by HSBC
14^th February	Helsinki	Sean Kidney	Speaking at launch of Climate Bonds Initiative report on Nordic green munis at British Embassy
14^th– 15^th February	Stockholm	Manuel Adamini	Meeting with Nordic Climate Bonds Partners and prospective issuers
15^th February	Stockholm	Sean Kidney	Speaking at Green Bonds and Sustainable Capital Markets Conference, organised by Handelsbanken
16^th February	Amsterdam	Sean Kidney	Delivering keynote at “Making Solar Bankable, Evolving Business Models in Emerging Markets”, organised by Solarplaza and FMO
16^th February	The Hague	Manuel Adamini	Meeting with Dutch Climate Bonds Partners and prospective issuers
19^th February	London	Sean Kidney	Addressing London Business School
27^th February	Santa Monica	Justine Leigh-Bell	Participating in a Financial Innovations Lab at California State Treasurer’s Green Bonds Symposium hosted the Milken Institute
28^th February	Santa Monica	Justine Leigh-Bell	Speaking at Day 2 California State Treasurer's Green Bonds Symposium hosted by Environmental Finance

Last but not least, the most exciting event in 2018: Climate Bonds Annual Conference and third Annual Green Bond Pioneer Awards on 20-21 March in London. Conference details and the agenda are here .

Don’t miss it out, register now.

‘Till next time,

Climate Bonds

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Underwriter League Tables for 2017: BAML tops both Q4 & the full year: Crédit Agricole & HSBC 2nd & 3rd - full figures and data

January 31, 2018, 4:00 pm

≫ Next: Green bond: c’è anche l’Italia nel 2017 dei record. L'articolo di Sean Kidney per RiEnergia

≪ Previous: February Events: From Stockholm, to Amsterdam, Helsinki, Delhi, Brasilia, Santa Monica, Kuala Lumpur & many more!

The race continues in the quarter and year with record-breaking green bond issuance levels

The big underwriters, the new entrants in the top 20, US Muni green bond issuance impact on the rankings and more captured in our latest figures

2017 has been a great year for green bonds, with total issuance reaching USD155.5bn – a new record and well beyond our 2016 forecast. Q4 was the busiest in the year with green bonds at USD46bn. November was the biggest month accounting for 13% of 2017’s total.

So, how did underwriters do in Q4?

Bank of America Merrill Lynch (BAML) takes the lead in Q4 with USD3.2bn underwritten deals, representing 12% of the quarter’s market share. Up from the 4^th place in Q3, BAML’s leadership in the last quarter of 2017 was driven by US Muni deals, which accounted for 86% of its total underwritten volume.

New York MTA’s USD2.2bn green bond – referred to in our latest Media Release as one of the ten largest bonds of the year - provided a significant boost to the bank’s ranking. Citi, Goldman Sachs, JP Morgan, Williams Capital and PNC also participated in the deal.

Crédit Agricole CIB came in second* in the Q4 league table with USD2.2bn, up one position from the last quarter.

HSBC listed a close third*, slipping back a spot compared to Q3. Underwritten deals for the quarter total USD1.8bn. It facilitated the offshore green bond deals from Industrial and Commercial Bank of China, Bank of China and China Development Bank. All three deals are Certified Climate Bonds.

ABN Amro Bank and SEB were also big movers coming from well down the ranks in Q3 to appear in the Top 10.

US Muni deals in Q4

US Muni deals helped drive the rise in rankings of other banks as well. Morgan Stanley made its return to Top 10 after a Q3 absence, with 46% of underwritten deals coming from US Muni green bonds. Barclays also secured a position in the Top 10 rankings also thanks to US Muni deals, which accounted for 13% of its total.

Los Angeles MTA’s USD471.4m was the issuance that ensured Wells Fargo 15^th spot representing the total of the bank’s underwritten deals of the quarter.

Turning to our 2017 annual league table…

US, French and English underwriters dominate the annual league table. BAML retains the top spot for the third year running!

BAML underwrote USD8.2bn through the year with 42% of the deals coming from US Muni issuance, another indicator of the importance of that market.

26% of the USD42.4bn US total green bond issuance in 2017 came from green muni bonds.

Crédit Agricole listed a close second place with USD7.6bn, up from third place in 2016. HSBC closely followed, jumping from 9^th spot in 2016 to being the 3^rd largest green bond underwriter of the year with a total of USD7.4bn in deals.

Driven by its top performance in the first three quarters of the year, Citi ranked 4^thwith 17% of its deals coming from US Muni green bonds. BNP Paribas made a return to the Top 10 since 2015 and took the fifth spot in the rankings.

France’s big Sovereign Green Bond of EUR 9.7bn (USD10.7bn) – the largest single green bond issued to date – made a significant contribution to BNP’s ranking and also to Credit Agricole and Natixis who both participated in the deal.

International banks have facilitated offshore large individual green bond issuance from emerging markets, especially green bonds denominated in euros or US dollars. Examples range from India’s Power Finance Corporation Certified USD400m issue, underwritten by Barclays, to the ICBC One Belt One Road Green Climate Bond - the inaugural green bond from the world’s largest bank - with BAML, Crédit Agricole and HSBC among the joint bookrunners.

In contrast, domestic green bond issuance in emerging markets was dominated by local banks and securities companies. China’s CITIC Securities made it into the Top 20 underwriters in 2017.

Along with the familiar faces, we also saw a few new ones: ICBC, BBVA, ABN AMRO and the Agricultural Bank of China all made it to the 2017 annual Top 20 table for the first time.

European & Chinese Underwriters

Between them, European and Chinese underwriters comprised 70% of the 20 leaders for the year.

If yesterday’s recommendations from the EU HLEG on Sustainable Finance gain traction and Chinese market growth continues, the 2018 table may show some more.

Till our next quarterly update, bragging rights are with BAML, congratulations!

‘Till next time,

Climate Bonds

P.S.: Methodology and data

Since Q3 2016, the underwriters league tables are collated using data from Thomson Reuters except for US municipal bonds which are calculated by the Climate Bonds Initiative. As such, ranking volumes differ from Thomson Reuters tables. Volumes may differ from other league tables as they include all ABS deals and US municipal bonds and exclude bonds which have less than 95% of proceeds going to environmental assets/projects or aren’t within the Climate Bonds taxonomy.

Methodology notes from Thomson Reuters

Primary Issuance only
Underwritten transactions only
Thomson Reuters data excludes tax exempt Muni bonds
The global table includes transactions that mature at least 360 days after settlement, for international 18 months and above.
Transactions that mature or are callable/puttable less than 360 days after settlement are excluded, for international 18 months and above.
Self-funded straight debt transactions are excluded (excluding mortgage and asset securitizations) unless two or more managers/underwriters unrelated to the issuer are present. The unrelated firm in a self-funded transaction with only two Book runners in the syndicate will receive league table credit.
Transactions with an issue size of less than USD 1 million (equivalent) are included, sole led MTN take owns with a minimum size of USD 50m for core currencies are included, USD 10m for non-core.
Deals must be received within five business days of pricing to be eligible.
For a transaction to be green league table eligible, deals must have 100% of proceeds formally earmarked for green projects.
Issuances where there is a mixed use of proceeds designated across different projects, are not eligible for example, ESG bonds that combine both social and green projects.

For further queries please contact ian.willmott@thomsonreuters.com.

*Correction: An earlier version of this communication had incorrect rankings, also placing Santander in the 2^nd position in the Q4 League Table, with a reference in the headline. This error has now been rectified. The rankings in the Q4 table have subsequently been adjusted, as has the associated text, to reflect the correct order of all underwriters. These errors did not affect the 2017 Table and rankings. Our apologies for any confusion this may have caused.

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Green bond: c’è anche l’Italia nel 2017 dei record. L'articolo di Sean Kidney per RiEnergia

February 1, 2018, 4:00 pm

≫ Next: China Green Bond Market Annual Report: 2017 issuance at record USD37.1bn: Jointly published by CBI with CCDC & supported by HSBC

≪ Previous: Underwriter League Tables for 2017: BAML tops both Q4 & the full year: Crédit Agricole & HSBC 2nd & 3rd - full figures and data

Abbiamo il piacere di riportare di seguito il recente contributo di Sean Kidney pubblicato da RiEnergia. L'articolo originale è disponibile qui. Se volete scoprire di più sul mercato dei green bond, non perdetevi la Annual Conference di Climate Bonds Initiative. Dettagli qui.

Green bond: c’è anche l’Italia nel 2017 dei record

A livello mondiale, l’emissione record di green bond per 155,5 miliardi di dollari nel 2017 continua a fare notizia. L’Italia è stata uno dei primi paesi ad entrare sul mercato nel 2014 con il primo green bond a firma Hera che ha permesso il finanziamento di 26 progetti di sostenibilità.

Da allora, altri soggetti hanno seguito l’esempio: il 2018 si è aperto con il green bond da 1,25 miliardi di euro di Enel, azienda leader nel settore energetico, i cui proventi finanzieranno principalmente progetti di generazione di elettricità da fonti rinnovabili e le loro reti di distribuzione, oltre che progetti volti ad incrementare l’efficienza energetica della rete elettrica.

Anche su scala globale gli investimenti in energie rinnovabili rappresentano la destinazione più comune dei proventi della cosiddetta finanza verde secondo l’ultima analisi di Climate Bonds Initiative (CBI), l’organizzazione internazionale non-profit focalizzata a promuovere lo sviluppo e la crescita dei mercati internazionali dei green bond.

I green bond finanziano progetti sempre più diversificati

CBI, assieme ad un gruppo di scienziati ed esperti del settore, ha sviluppato uno strumento di classificazione che identifica otto settori caratterizzati da un’economia a basse emissioni di carbonio: la Climate Bonds Taxonomy. Fino ad oggi, oltre a programmi di adattamento al cambiamento climatico, i green bond hanno finanziato progetti appartenenti a sei di questi settori.

Storicamente, gli investimenti in energia rinnovabile hanno sempre dominato su tutti gli altri settori, ma con la crescita del mercato sono stati rilevati alcuni cambiamenti interessanti. Nel 2017, i finanziamenti diretti all’efficienza energetica e agli edifici a basso consumo sono più che raddoppiati rispetto al 2016, arrivando a rappresentare il 29% degli investimenti.

Anche il settore dei trasporti a basse emissioni è cresciuto notevolmente, quasi raddoppiando il volume rispetto all’anno scorso, grazie all’incremento di finanziamenti diretti a infrastrutture ferroviarie e trasporti pubblici. Ferrovie dello Stato Italiane ha contribuito a questa crescita con l’emissione del suo primo green bond da 600 milioni di euro a dicembre 2017.

Settori finanziati dall’emissione di green bond, confronto tra 2016 e 2017

Ma cosa sono i green bond?

Per emettere un green bond è sufficiente che i proventi dell’obbligazione vengano usati per finanziare progetti che siano allineati con la Climate Bonds Taxonomy e che contribuiscano alla riduzione delle emissioni di carbonio. A livello internazionale sono stati sviluppati sistemi di assicurazione per gli investitori che garantiscano lo sviluppo di un mercato trasparente ed integro:

I Green Bond Principles (GBP), principi sviluppati dall’International Capital Markets Association (ICMA), delineano chiari requisiti per gli emittenti circa le definizioni dei progetti da finanziare, il loro processo di selezione, la gestione dei proventi e la rendicontazione;

Il Climate Bonds Standard, sviluppato da tecnici, esperti del settore ed investitori coordinati dalla Climate Bonds Initiative, definisce i criteri dei GBP e i progetti cosiddetti ‘green’. Il Climate Bonds Standard si collega ad un processo di certificazione dei green bond che garantisce l’impatto dei propri investimenti agli occhi degli investitori. Un numero sempre maggiore di alcune tra le più grandi banche e corporation mondiali hanno adottato questo approccio per dimostrare come i loro finanziamenti siano allineati ad un’economia sostenibile.

Mercato Italiano a quota record

Il mercato italiano dei green bond nasce nel 2014, con l’emissione di un’obbligazione da 500 milioni di euro da parte di Hera e un mini green bond di 3,2 milioni di euro da parte di Enna Energia per finanziare progetti di energia rinnovabile. Da allora, altri otto emittenti sono entrati nel mercato, cinque dei quali nel 2017.

In totale, i green bond emessi da compagnie italiane hanno raggiunto un volume complessivo di 5,9 miliardi di dollari a metà gennaio 2018, di cui 3,3 miliardi di dollari emessi nel solo 2017, un valore otto volte superiore alle emissioni che si registrarono nel 2016.

Circa l’80% dei volumi è coperto da società private, il 12% da enti pubblici e il restante 10% da organizzazioni finanziarie. Enel occupa il primo posto tra gli emittenti italiani, con un ammontare di 2,5 miliardi di euro, seguita da Ferrovie dello Stato e dalla multiutility Hera (500 milioni di euro). L’Italia occupa il dodicesimo posto nella classifica mondiale di paesi per volume di green bond nel 2017, mancando di poco una posizione nei primi dieci.

Anche il 2018 sembra promettere bene: dopo aver recentemente annunciato la sua prima emissione da 70 milioni di euro, si prevede che l’Italian Green Fund del Gruppo Foresight, - il primo fondo italiano dedicato al finanziamento di infrastrutture attraverso green bond -, inizi ad investire in progetti di energie rinnovabili ed efficienza energetica nel primo trimestre dell’anno.

Si sente addirittura parlare di possibili emissioni di Stato: in occasione di un’audizione in commissione Finanza della Camera a fine settembre 2017, il commissario Consob Anna Genovese ha prospettato la possibilità di emettere BTP (Buoni del Tesoro Poliennali) green. Se questa prospettiva si avverasse, l’Italia si assicurerebbe un posto tra i paesi capolista.

Titoli di Stato verdi in crescita

Il 2017 è stato denominato “l’anno delle obbligazioni verdi sovrane” (sovereign green bonds). Il titolo di Stato verde francese da 9,7 miliardi di euro ha ottenuto il record di più grande singolo green bond mai emesso fino ad ora.

E la Francia non è la sola a far notizia: poco prima di assumere la Presidenza della COP23 tenutasi a Bonn, le isole Fiji hanno annunciato l’emissione di un’obbligazione di Stato verde da 40 milioni di euro; la Nigeria, nel dicembre 2017, ha emesso un green bond di Stato da 24 milioni di euro, il primo titolo di Stato verde mai lanciato da un paese africano, nonché il primo ad ottenere la certificazione relativa al Solar e Land Use Criteria sotto il Climate Bonds Standard.

Si prevede che le emissioni verdi sovrane continueranno nel 2018: in Indonesia tutto è pronto per il lancio del primo green bond di stato, mentre Belgio, Svezia, Marocco e Kenya hanno già manifestato il loro interesse ad emettere titoli di stato verdi.

Stati Uniti, Cina e Francia dominano le classifiche globali dei green bond

In testa alla classifica di paesi con il maggior volume di emissioni ci sono Stati Uniti, Cina e Francia che insieme hanno rappresentato il 56% del mercato globale nel 2017. I restanti posti della “Top Ten” sono occupati da: Germania, emittenti sovranazionali, Spagna, Svezia, Olanda, India, Messico e Canada. Su scala globale, il mercato dei green bonds ha attratto emittenti da 37 diversi paesi, 10 dei quali hanno fatto il loro debutto per la prima volta nel 2017.

Crescita del mercato globale dei green bond per categoria

Obiettivo 2020: green bond a mille miliardi per anno

Il 2017 è stato un anno di forte crescita per i green bond sia in Italia che nel resto del mondo, ma c’è ancora molta strada da percorrere. Per contribuire in modo significativo alla transizione verso un’economia sostenibile, la Climate Bonds Initiative sostiene il Mission 2020 milestone, secondo il quale le emissioni di green bond devono raggiungere i mille miliardi di dollari all’anno entro il 2020.

Climate Bonds stima che nel 2018 potranno essere emessi tra i 250 e i 300 miliardi di dollari di green bond, rappresentando una crescita di almeno il 60% rispetto al 2017.

Per raggiungere l’ambizioso target al 2020 è necessario quindi superare le stime di crescita e per fare in modo che ciò accada è richiesto uno sforzo in più, specialmente dai sostenitori e firmatari dell’Accordo di Parigi. A partire dall’Italia.

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Un ultimo commento

Vuoi scoprire di più sul mercato dei green bond e su come raggiungere un mercato da mille miliardi di dollari? Registrati subito e partecipa alla Annual Conference di Climate Bonds Initiative che si terrà il 20 e 21 marzo a Londra. Agenda e dettagli sono qui.

Cogliamo l'occasione per ringraziare ancora RiEnergia per averci dato l'opportunità di ripubblicare questo articolo nel nostro blog.

RiEnergia è un portale d’informazione online ad accesso completamente gratuito ideato da Rie-Ricerche Industriali ed Energetiche in collaborazione con Staffetta Quotidiana.

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China Green Bond Market Annual Report: 2017 issuance at record USD37.1bn: Jointly published by CBI with CCDC & supported by HSBC

February 6, 2018, 4:00 pm

≫ Next: Indonesia: IDX in new Partnership with CBI: Meanwhile EBA & PINA sign new MoU with CBI to join forces on green infrastructure investment

≪ Previous: Green bond: c’è anche l’Italia nel 2017 dei record. L'articolo di Sean Kidney per RiEnergia

Climate Bonds Initiative and CCDC jointly publish the second annual China Green Bond Market report, supported by HSBC

Twin Hong Kong and Beijing Launches

2017 see developments in regulation and steps towards achieving harmonised definitions of “green”

5 catalysts to drive market growth towards 2020

What’s it all about?

On Thursday 8th Feb, Climate Bonds Initiative and China Central Depository & Clearing Co. Ltd (CCDC) with the support of HSBC launched the China Green Bond Market 2017 report, in Hong Kong followed by a Friday mainland launch in Beijing.

The new report summarises the major developments that have taken place during the year, focusing on green bond issuance, policy development and wider market growth.

The latest figures show total green bond issuance from China reached USD37.1bn (RMB248.6bn) in 2017, 4.5% up on the previous 2016 record. Of this total, USD22.9bn (RMB 154.3bn) issuance is aligned with international definitions, accounting for 15% of the USD155.5 global green bond record for 2017 and making China the second largest green bond market in the world.

Download the full report in English.
Download the full report in Chinese: 点击下载中文报告

2017 Highlights:

118 green bonds were issued during 2017 (113 onshore, 5 offshore).
USD37.1bn (RMB248.6bn) green bonds were issued, of which 62%, or USD22.9bn (RMB 154.3bn), aligned with international definitions.
USD6.01bn (RMB40.2bn) of issuance was Climate Bonds Certified, including the USD2.15bn debut green bond from Industrial & Commercial Bank of China (ICBC) the worlds’ biggest bank.
The largest cumulative issuer in the year was China Development Bank (CDB) which included a Climate Bonds Certified offshore bond of USD1.67bn (RMB 11.1bn).

Regulatory momentum, green finance developments & harmonisation

Policy support continued with several new developments in 2017, including:

China Securities Regulatory Commission (CSRC) issued green bond guidelines for Chinese listed companies;
Green Finance and Ecological Protection were included into the 2017 Government Work Report;
The Fifth National Financial Work Conference encouraged development of green finance;
New guidelines for verifiers were released by PBoC and CSRC in December;
The State Council set up pilot zones in Guangdong, Guizhou, Jiangxi, Zhejiang and Xinjiang to promote green finance;
Four Ministries, jointly issued ‘Guidance on Promoting Green Belt and Road’, signalling a boost for green infrastructure.

China is also working towards harmonizing local green bond guidelines with those of international markets. In November 2017, China’s Finance Committee, operating with the support of the PBOC, and the EIB launched a White Paper providing an international comparison of several green bond standards. This represents a first step towards achieving harmonised green bond definitions between China and the EU.

It's also worth reminding Blog readers that Hong Kong has signaled a sovereign green bond this year and amongst new policy measures to promote green finance.

Five catalysts for growth

To play its part in reaching the global USD1tn by 2020 milestone, the Chinese market needs to achieve a tenfold growth in green bond issuance in the next three years.

The report outlines five catalysts for growth, including:

A greener ‘Belt and Road Initiative’
Increasing green sovereign and sub-sovereign issuance
Inter-country capital flows supporting green bond market growth
A growing role for Hong Kong
A ‘Green Bond Connect’ to help international investors invest in China’s domestic market

Who’s saying what?

Sean Kidney, CEO of Climate Bonds Initiative:

“China’s green bond issuer base is expanding and diversifying, while green bond regulatory frameworks are strengthening, driven by strong policy signals from the government.”

“Already one of the world’s largest green bond markets, increasing inter country capital flows will be one of the catalysts to bring green finance in China to new heights. Acceleration of existing investment levels is pivotal to the country’s low carbon growth path to 2030 and beyond and its impact on international climate targets.”

“Global finance, investors and regulators all have a role in steering green investment towards the USD1tn by 2020 milestone, then higher again. A significant amount of this capital will need to flow to environmental and climate projects in China. With continued efforts around harmonisation and standards the foundations are there for boosting investment.”

Zongjun, Director of Research and Development Department, CCDC:

“In 2017, China issued a series of policies that clearly defined the overarching top-level design of green finance and repeatedly emphasized its ambition to forge ahead the development of green bonds.

“Green bonds have become an important part of China's green finance system and received great attention from parties across different sectors. The China green bond market has grown steadily with issuance making up 22% of the world’s total in 2017. "

"As the core financial infrastructure of China's bond market and a council member of China Green Finance Committee, CCDC has undertaken a lot of groundbreaking and pioneering works in the green bond market, which include the explorative study on green bond identification and classification standard, the release of China's first green bond index and the introduction of the concept of green bond identification and classification.""CCDC has played an active role in enhancing the transparency of China's green bond market, as well as conveying the positive image of green bond issuers and promoting the development of a green economy.”

“CCDC will continue to embrace the concept of green development, support the development of China's green bond market with a more comprehensive and well-established financial infrastructure services, and contribute in promoting the green development in China and the world.”

Helen Wong, Chief Executive, Greater China, HSBC:

“Climate change is an urgent threat to the planet and unprecedented investment is required to finance less carbon-intensive technologies and infrastructure. Green bonds, first launched a decade ago, are now critical to financing a more climate-resilient economy. Green bonds allow an issuer to demonstrate they are proactively preparing for the long-term challenges of global warming. Over the long term, this could well create an advantage in terms of valuation and business prospects, attracting investors with growing demand for assets that align with environmental, social and governance (ESG) principles.”

“A sustainable economy is clearly a policy priority for the Chinese government and an opportunity for businesses and investors. HSBC is committed to bringing together the companies who want to raise capital for sustainable projects with institutions that want to invest in accordance with ESG principles. As an international financial centre and the largest offshore renminbi (RMB) centre, Hong Kong is well-positioned to be the hub for green bonds.”

The Last Word

We've noted that 2017 has seen green bond issuance grow beyond some expectations, to a record USD 155.5bn. China is one of the largest contributors, No2 in the global Top Ten of issuing nations.

However, we must look past single years and keep our gaze on achieving the next big milestone: USD1tn in green bond issuance by end 2020.

The Chinese government’s sustained focus on environmental challenges at a central and local level, a continued momentum in regulatory reforms and an increase in cross-border capital flows will play a role in securing the ambitious level of green growth required. As with Brazil, India, Indonesia & other emerging economies, green investment, low carbon development and NDC targets are inextricably linked.

China's progress is also global progress on the 2 degree target. The catalysts for growth outline where that progress will come from.

Download the full report in English.
Download the full report in Chinese: 点击下载中文报告

‘Till next time,

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