Climate Bonds Blog

COP19 snippets #2: new rpt shows climate finance flows flat @$359bn p.a. vs $1tn needed / IEA says we have to make EE 'cool' / OECD platform to support Green Banks / World Bank: could EM megacities issue green munis to fund green transition?

Posted: Nov 24, 2013

Climate Policy Initiative has launched a useful Climate Finance Landscape web site.

Key finding: climate investment plateaued at $359 billion in 2012, far short of the need. In contrast, the IEA projects that an additional investment of $5 trillion (above business as usual) is required between now and 2020 for clean energy alone, to limit warming to 2°C. Work to do.

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Some useful facts from a cracker of a presentation by IEA's Philippe Benoit:

The global solar PV capacity grew 42% last year and wind energy capacity by 19%.

COP19 snippets #1: UN climate negotiations a damp squib / HSBC's Robins "We need to integrate climate into financial policy" / GGGI CEO says investors should expect change in a rush, leaving assets stranded: "hedge your bets"!

Posted: Nov 24, 2013

For most of the past fortnight I've been in Warsaw, more talking 'private sector climate finance' than UN climate agreement, despite the negotiations being the ostensible reason for the gathering of very many nations. From my perspective there are so many key people around that you can do a year's worth of meetings in one burst; very efficient. Of course negotiations were underway all over the place, if you can call arguing for days about a sentence a "negotiation" - all a damp squib really. Memories:

Japan bowed it's head and said "without nuclear - and renewables not scaling up as quickly as we had hoped - we have to rely on gas ... so our emissions targets are wrecked". Awkward.

Germany's NRW does a "water" bond EUR250m 4yr AAA

Posted: Nov 22, 2013

NRW Bank, the development bank of the German State of North Rhine-Westphalia, has just issued a EUR250 million, 4 year bond, the proceeds of which will go to refinancing environmentally friendly water and energy projects in the State.

Interest rate is 0.75%. Bond ratings were: Moody's Aa1 (Neg) / S&P AA- (Stab) / Fitch AAA (Stab). Joint bookrunners were Crédit Agricole CIB and DZ Bank.

Investor type:

Banks 40%

Funds managers 34%

Central banks / official institutions 24%

Pension & Insurance funds 2%

Regional spread:

Germany's NRW does a "water" bond EUR250m 4yr AAA

EDF closes humdinger EUR1.4bn green bond, A+, 7.5yr - 2 x oversubscribed. Wow! This is how investors vote.

Posted: Nov 21, 2013

Electricité de France (EDF) today set a new high for a green bond - a benchmark-sized EUR1.4 billion (nearly $1.9bn). A terrific achievement.

The bond was two times over-subscribed - so I guess that's another EUR1.4bn that's still looking for a green home.

Ratings are A+ S&P / Aa3 Moody’s / A+ Fitch. The bonds are tied to EDF's renewable energy assets - which makes them a climate bond in our eyes.

EDF closes humdinger EUR1.4bn green bond, A+, 7.5yr - 2 x oversubscribed. Wow! This is how investors vote.

UK Govt announces it's joining US, Scandis, World Bank, EIB to end overseas aid support for coal power and stop other MDBs. First test: EBRD's Kosovo coal plant

Posted: Nov 21, 2013

The UK Government announced today they will join the US and Scandinavian countries in agreeing to end support for public financing of new coal-fired power plants overseas, except in "rare circumstances in which the poorest countries have no feasible alternative".

UK Govt announces it's joining US, Scandis, World Bank, EIB to end overseas aid support for coal power and stop other MDBs. First test: EBRD's Kosovo coal plant

Former Deutsche Bank Climate Change Advisors head of research, Mark Fulton, joins Climate Bonds as a Senior Fellow, working on green securitization

Posted: Nov 20, 2013

Speaking in London today, Mark said: "Green securitization is an enormously important area we need to address if we're to successfully scale up finance to tackle climate change."

“The securitization of loan portfolios for renewables, energy efficiency loans and smaller scale climate debt opens up the opportunity to more quickly recycle bank capital - and equity - and so support more projects. Importantly , if investment grade, institutional investors can add these products to their mainstream bond portfolios”

Former Deutsche Bank Climate Change Advisors head of research, Mark Fulton, joins Climate Bonds as a Senior Fellow, working on green securitization

HK's GCL-Poly goes convertable solar

Posted: Nov 20, 2013

FinanceAsia reports that Chinese renewable energy generation company GCL-Poly has privately placed a USD200 million, 0.75%, 5 year convertible bond with PAG Investments.

GCL-Poly, also the largest supplier in China of polysilicon for solar cells, is 20% owned by Chinese sovereign wealth fund CIC.

HK's GCL-Poly goes convertable solar

Zurich Insurance allocates $1bn to green bond investing; mandate goes to BlackRock

Posted: Nov 20, 2013

According to the Financial Times yesterday, Zurich Insurance has decided to invest up to $1 billion into green bonds that finance projects aimed at mitigating climate change and climate change adaptation.

Cecilia Reyes, chief investment officer at Zurich, which manages more than $200bn of total assets, said the company wanted "to improve liquidity in the $11bn green-bond market, stimulate interest from other investors and encourage new issuers". Good on them.

Zurich Insurance allocates $1bn to green bond investing; mandate goes to BlackRock

Bank of America closes their own 3yr, Baa2, $500m green bond - a US first

Posted: Nov 20, 2013

Bank of America raised $500 million in the first sale by a US bank issuer of green bonds. Expect this to be a dam-breaker - now we just need to make sure the myriad banks and corporates that will surely follow comply with robust standards and that green credentials are reviewed by qualified third party actors.

The interest rate was 1.35 percent, 80 basis points more than US Treasury bonds of a similar nature. Bloomberg report that the bond is likely to be rated Baa2 by Moody’s.

Bank of America closes their own 3yr, Baa2, $500m green bond - a US first

Swedish property group Vasakronan issues SEK1.3bn ($197m) Green Bond - theme goes corporate

Posted: Nov 20, 2013

Vasakronan is a Swedish property company with investments in Stockholm, Uppsala, Gothenburg, Malmö and Lund. They've just issued a SEK 1.3 billion Green Bond, with the proceeds going to finance upgrades of some existing buildings and new building construction to LEED Gold or better, or BREAM certification. Vasakronan properties have an energy consumption which is apparently 47% below average.

Swedish property group Vasakronan issues SEK1.3bn ($197m) Green Bond - theme goes corporate

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