Climate Bonds Blog

- I’m in Qatar, a place slightly smaller than Connecticut, prosaically described in my travel guide app as “mainly flat and barren desert, covered with loose sand and gravel”. There’s not a lot of desert left in its capital, Doha, just a vast sea of choked-up highways (serious SUV traffic!) and low-rise buildings punctuated by monumentalist skyscrapers, all thanks to huge natural gas resources. Pity we're going to have to leave a large part of that gas in the ground if we're going to avoid catastrophic climate change.

The £6 bn Pension Insurance Corporation (PIC) has bought up as a private placement the first ever UK publicly-listed solar bond, a £40m ($64m), 24 year bond linked to two 5 MW solar plants in Somerset owned by Solar Power Generation. Private placement may be ubiquitous in the US, but it's not so common in the UK - so full marks to deal arranger Independent Debt Capital Markets.

The European Investment Bank (EIB) this week issued a 11 year Swedish Krona 750 million ($111 million) 'Climate Awareness Bond', with an interest rate of 2.75%.

Scandinavian investors took 51% of the bond, other European investors 22% and Asian 27%. Fund managers took 54%, bank treasuries 41%. Bookrunners were Danske Bank and HSBC.

Canada’s Next Era Energy recently issued an asset-backed $175m, 19 year solar bond. Rating BBB, interest rate 4.80%. As Bloomberg pointed out, this was a higher rating than Warren Buffett’s MidAmerican Energy Holdings' Topaz solar bond - because there was no construction risk. Sole Bookrunner was Royal Bank of Canada (RBC).