We’re holding the final of our Bonds and Climate Change 2013 report webinars tomorrow @ 10am New York, 3pm London, 4pm Frankfurt, 10pm Beijing. If you've missed out so far, quickly RSVP to bridget.boulle@climatebonds.net. She will send you the log-in details.
Climate Bonds Blog
This China banking regulator stuff is getting exciting.
Under China's Green Credit Banking Guidelines (see last night's blog) banks are meant to a make sure that environmental assessments have been done for all company lending and that projects financed by loans remain in compliance with environmental laws. According to the Annual Report of Green Credit in China, only a small percentage of banks are so far reporting on this and the various other related regulator guidelines around green finance.
Spanish waste management company Befesa Medio Ambiente SA is the global leader in recycling steel dust into zinc and also the global leader in aluminium recycling. We count corporate bonds from companies like Befesa as part of our bonds and climate change universe when they come from companies 100% devoted to "circular economy" activities that lead to lower lifecycle energy and GHG usage (e.g. recycling aluminium uses a LOT less energy than making it).
I've spent all day in a Beijing roundtable with a few colleagues, talking with representatives of the State Council's Development Research Centre and various finance sector regulators. It's all about green finance and green bonds, organised by Simon Zadek at IISD and following the government's announcement that it would develop a corporate green bond market.
The African Development Bank (AfDB) has just issued the 3 year, USD500 million green bond they flagged over Summer; the deal closed yesterday at 14:30 London time. The bond 10% over-subscribed by the close of the half-day sales window. Coupon was 0.75% - yes, interest rates really are that low for AAA bonds!
To avoid dangerous climate change will require the equivalent of another industrial revolution. This can only be achieved if finance into the green economy is increased by an order of magnitude. This may be possible as many low carbon technologies are competitive with fossil fuel if the cost of finance is low enough
Below are 10 tweaks based on the premise that if financing the green economy becomes attractive for actors within the financial system, in particular banks, investment banks and the shadow banking system, then these actors will aggressively promote investment into this sector.
Our NYC Bonds & Climate Change seminar 26 Sept was over-subscribed (just like most green and climate bonds nowadays!). Even with a great venue kindly provided by Bloomberg, RSVPs were way over the fire department limit - so we've holding a final Bonds and Climate Change 2013 report webinar on 21 October, 10am NYC, 3pm London, 4pm Frankfurt. Register here – log-in details to follow.
Two new corporate climate-related bonds were issued this week.
The first, by Hong Kong-listed polysilicon producer Gold Poly, was a $50m convertible bond to finance the solar business of its project acquisition subsidiary China Solar Power Group. The bond is a 3 year bond with a 5% coupon.
The Green Muni GO crosses the Atlantic, from Massachusetts to Sweden
On Friday Sweden's Gothenburg became the first Nordic city to enter the climate bonds space, closing a SEK500m ($77m), 6 year green bond to fund public transport, water management, energy and waste management projects. The bond is part of a potential SEK 2 billion green bond programme for such projects in Gothenburg. The bond carries Gothenburg’s AA+ and Aaa ratings from S&P and Moody’s.