In early November Department de L’Essonne, a French municipality that is part of Ile-de-France, issued an inaugural green bond to fund low carbon transport and green building projects. The EUR 40m (US$50m) private placement has a 14.5 year tenor and 2.083% coupon. S&P and Fitch rated the bond AA- and AA respectively. Credit Agricole CIB was the sole underwriter for the bond. Two of the three European investors that participated in the private placement were French; reflecting domestic appetite for green bonds.
We’ve taken awhile to blog it because we’ve been waiting on L’Essonne to publicly release information about the bond. In the end we can say there is good disclosure on the use of proceeds, similar to the Ile-de-France green bond in May this year – it just took awhile to come out.
According to the press statement proceeds from Essonne’s bond will fund:
Low carbon transport projects
- Transit development project for the business park Plateau de Saclay
- Development of train station Grand Pole in Juvisy-sur-Orge
Green building projects
- Expansion and restructuring of a secondary school: College Charles Peguy Morsang-sur-Orge.
- Construction of “City Val Verde”; educational centre for information on sustainable living and eco-construction in Plessis Pâté.
- Refurbishment of municipal buildings
- Construction of a retirement home in Les Ulis
Transport projects focus on improvements on connectivity of public transport. One project will renovate the infrastructure surrounding the Juvisy train station creating a new tram station and bicycle parks immediately outside the station. The underground rail line is to be extended and the station will link directly to the RER D – a rapid transit line. Joining up these different types of low carbon transport systems will make it easier and quicker for local residents. By making public transport a more appealing option Essonne hopes to achieve a reduction in the number of car journeys and increase in use of public transport.
Vigeo assisted in the development of reporting criteria to show how effective the project is in achieving modal shift. We can’t wait to see the results!
Proceeds will also go towards four low carbon building projects all to the BBC energie standard. This French standard sets the required energy efficiency building level at a higher level than the regulation minimum. Although an important step - achieving a building standard at the time of construction is no guarantee for the energy efficiency of a building over time. Essonne clearly agrees and has committed to reporting the ongoing energy performance of buildings. Tres bien!
Although there is no second opinion on the green bond (as mentioned earlier) Department de L'essonne did use Vigeo to develop green eligibility criteria and reporting key point indicators. They will also be reporting on the social outcomes of projects; such as the use of currently unemployed labour. This report will certainly be one to watch next year.