>You have to hand it to the US IRS (Internal Revenue Service) – they seem to have a sense of humour.
In 2004, the US Congress created tax-credits for Green Bonds for large construction projects that would serve as demonstrations of alternative energy technologies. In 2007 Destiny USA issued $228m in Green Bonds under the program to finance a “green” expansion of a big shopping centre in Syracuse NY.
1. The EU’s chief climate negotiator says the world is on track for around 4°C of global warming under current carbon emissions trends, a trajectory that some scientists say risks a planetary mass extinction event. Read the EurActiv story - http://goo.gl/yo8sn.
The OECD's new Environmental Outlook to 2050 – the equivalent of a planetary health check - is, frankly, deeply disturbing. It has special implications for institutional investors like pension funds, for whom sustainability of value creation is central to their fiduciary duty.
Warren Buffet is a famous proponent of value investing and he surely received a sign of the value in solar investments over fossil fuels last week. The MidAmerican Energy $850m Topaz solar project bond we mentioned a couple of weeks ago was so successful that a second tranche is expected to cover the remaining debt of the project. The offer was oversubscribed by $400m which would have mopped up the total $1.2bn of debt in the project; Buffet is a shareholder in MidAmerican.
In contrast, Buffet's investment in $2bn of bonds from gas company Energy Future Holdings is taking a hit due to low gas prices in US. The market value of the investment is already at $878m with further write downs expected.
DUBAI, 5 March 2012 – The Climate Bonds Initiative, the Clean Energy Business Council of the Middle East and North Africa and The Gulf Bond & Sukuk Association today announced they have launched a Green Sukuk Working Group. The group aims to channel market expertise to develop best practices and promote the issuance of sukuks for the financing of climate change investments and projects, such as renewable energy projects.
Green sukuks are Shari’ah compliant investment securities that finance projects meeting eligibility criteria developed by the International Climate Bond Standards scheme. The first meeting of the Green Sukuk Working Group was held last week in Dubai, United Arab Emirates.
Israel Electric Corporation has issued a $500 million bond in the US to buy solar energy capacity to replace gas from Egypt. http://goo.gl/KrCRP
Warren Buffet-owned MidAmerican Energy has issued a $700m senior secured 27 year project bond (BBB-) to fund its Topaz solar project. Barclays, Citi and are underwriting. http://goo.gl/eOKXD
By guest blogger “Corporate Bonder”The global bond market is huge. Data from the Bank for International Settlements shows that the total size of the global debt securities market (domestic and international securities) was $99.5 trillion as at June 2011, of which $89.9 trillion were notes and bonds. Governments accounted for $43.7 trillion of outstanding debt securities, financial organizations $43.8 trillion, corporations $11.0 trillion and international organizations $1.0 trillion.
This was the handout to go with a talk I've just given in Davos (thank you to the Corporate Knights/Inflection Point Capital Management "Global 100 Dinner" for inviting me). Let me know what you think - what sounds right, what needs more work?
The Context
> The European Investment Bank is a hero bank - it's the world's largest clean energy lender - but they have a dark side that uses cheap public money to build new coal-fired power stations. It's policy lunacy because it means the EU's bank is undercutting EU emissions reduction targets (let alone the world's).
According to Bloomberg, China’s second-biggest wind turbine maker, Xinjiang Goldwind Science & Technology, plans to sell $63 million (4 billion yuan) of three and five bonds in February. China International Capital Corp is the lead underwriter.
