> Canada's BMO Capital is, according to this story, predicting C$772-million of renewable energy project finance bonds from the country in 2013. For example, expect to see a new 17yr wind bond from Brookfield / Comber Wind. DBRS have already rated it BBB.
> IFC $1bn Green Bond snippets:
1. Within an hour of opening, books were oversubscribed; the deal closed 3 hours later, by now heavily oversubscribed.
2. There were 56 buyers:
The IFC has just issued (books closed a couple of hours ago) a USD1 billion, 3 year, AAA "Green Bond" tied to climate investments - yes, that's a climate bond in our parlance. Interest rate set at 3 year US Treasuries +15 basis points. If you want to see just how low interest rates are for US Treasury bonds see this Wall Street Journal story. Low low low.
+ The UK's £4.6bn Lancashire County Pension Fund has invested in a 23.5 year, £12m ($18m) solar bond, issued by a community-owned solar power plant in Oxfordshire. According to I&PE, the bond gives Lancashire a return "3 percentage points above the retail prices index". Westmill Solar Coop's 21,000-panel solar farm can generate 4.5m kWh a year - enough for 1,400 homes.
“There is more liquidity than ever being put into the system, but funds are still not being allocated to renewable energy projects”
“The bottleneck for renewable energy is not in construction financing but a year or two after construction [re-financing].”
“[Renewable Energy] is not an asset class where risk changes over time – it changes [only] between pre-completion to post-completion stages… it is incorrect to think that offloading an asset post-completion dumps risk onto others because the riskier part of the project is past.”
“Alignment of interest with investors is strong as the issuing bank retains the credit risk in Covered Bonds.”
Canadian ratings agency DBRS announced on Thursday that it had just rated as BBB a bond to be released by Canada's Brookfield Renewable Energy. The 17 year, C$454m, wind bond will allow Brookfield to re-finance its 165.6 MW Comber wind project. The project was completed in November 2011.
Governor Andrew Cuomo announced a new Green bank in his annual 'State of the State' address yesterday. He said the bank would focus on leveraging private sector capital for clean energy.
This is an excellent development. As we've argued since our inception, special purpose State financial institutions will play important enabling roles in leveraging private investment for public policy purposes.
Webinar with Sean Kidney on: "Financing Climate Change Solutions from Debt Capital Markets" - and introductory seminar.
In one hour the Climate Bonds Initiative will hold a roundtable to discuss the viability of renewable energy covered bonds as a means to broaden the debt capital market for low-carbon finance.
Sean Kidney, Chair of Climate Bonds Initiative, Frank Damerow of LBBW Bank and Stuart Clenaghan, Principal of Eco System Services Ltd, are the authors of the paper, ‘Renewable Energy Covered Bonds – How Covered Bonds market can be adapted for Renewable Energy Finance and how they can help catalyse innovation in low-carbon capital markets’, which provides the starting point of the roundtable.
At one of the final side events by the Turkish industry and business association, TÜSİAD, the talk is at first all about carbon. But carbon credits are not going to be a big driver of emission reductions in Turkey.
Turkey is growing fast, and energy demand is growing even faster as the middle class expands; but 70% of primary energy supply is dependent on fossil fuel imports, largely from sometimes capricious Russia. These fuel imports are responsible for the bulk of Turkey's sizeable current account deficit.
This week Chinese wind power developer, Longyuan Power closed a $400m senior hybrid bond deal (a mixture of debt and equity where holders are given the option to convert the bond into equity after a specified time period). The money raised will go towards financing Longyuan’s aggressive expansion plans which, according to reports could see offshore capacity increase by five times over the next three years.
