Climate Bonds Blog

Posted: Nov 20, 2010 by Sean Kidney

The "Andromeda" bond sale involves the securitisation of SunPower Italy's project finance loans for construction of two adjacent Italian solar parks with a capacity of 45.3MW and 6.1MW. Lead managers are BNP Paribas and Société Générale.

 

These will, as far as we know, be the first bond linked to solar assets. There are two issues of EUR 97.6 million; the first is fully backed by the Italian Import/Export agence, SACE, and rated Aa2 by Moodys. These have been placed with European institutional investors. The second tranche are not backled, and are rated Baa3; they've been placed with the European Investment Bank.

New Italian solar bond aims for €200 mil
Posted: Nov 6, 2010 by Sean Kidney

An interesting “Financing Energy Efficiency Retrofits in Buildings” discussion paper recently released in Madrid argues that a significant expansion of energy efficiency retrofits can be driven by a model that employs:

-       Standardized contracts adopted by a wide variety of loan originators, such as banks, utilities, ESCOs and other retail outlets.

-       A re-financing fund that agrees to buy loans using the standardized contract (thus driving adoption). The fund then taps the wholesale financing markets.

Spanish energy efficiency financing report proposes “Aggregated Investments Model”
Posted: Nov 4, 2010 by Sean Kidney

See their Special Report (first published in the International Herald Tribune) called "Sustainable Bonds Hope to Help Fix the Planet".

First time the International Herald Tribune and the New York Times have covered the issue in this fashion. Story begins:

"SINGAPORE — Financial experts may debate how much it would cost to shift the world to a low carbon economy, but they agree on one thing: the amount would be phenomenal. The International Energy Agency in Paris, for example, has estimated that it would take $46 trillion in additional clean-technology investments over the next 40 years to halve carbon emissions by 2050.

Climate bonds story in the NY Times/IHT
Posted: Nov 2, 2010 by Sean Kidney

Fiduciary duty for a pension trustee is about protecting the financial interests of fund members in the long term. But pension funds and other institutional investors spend more time looking at the trees rather than at the forest – they invest effort in asset management, yet virtually nothing in identifying and taking steps to manage systemic risks. This is despite the fact that a large proportion of their returns and risks are driven by systemic changes - value destruction in recent years is clear evidence of that.

The biggest systemic risk is climate change, where governments have to take decisive action within a very short time to have a reasonable chance of avoiding catastrophic climate change.

Fiduciary duty, pension funds and climate change
Posted: Oct 19, 2010 by Sean Kidney

UK 'green' energy company Ecotricity announced yesterday that it's issuing ‘EcoBonds’ to fund an expansion of its renewable energy generation capacity. The mix of assets to be developed includes wind, solar and renewable gas. Ecotricity is aiming to raise a modest £10 million with the bonds.

The fixed rate EcoBonds have a 4-year term and pay 7% - or 7.5% for Ecotricity customers. The bonds are aimed at ethical investment market, including, clearly, Ecotricity customers.

UK green power company issues £10m 'Ecobonds'
Posted: Oct 6, 2010 by Sean Kidney

Sean Kidney, chair of the Climate Bonds Initiative, will be speaking about Climate Bonds at three events in the coming month.

The first is an "Environmental Bonds Webinar" on 15 October 2010. This will be an online presentation. Also presenting will be fellow Climate Bonds associates Christopher Flensborg of SEB Bank and Simon Petley or Enviromarket.

Upcoming presentations about Climate Bonds
Posted: Oct 1, 2010 by Sean Kidney

The Asian Development Bank (ADB) has sold US$232.2 million worth of Clean Energy Bonds in the Japanese retail market to support its renewable energy and energy efficiency projects in Asia and the Pacific. Lead manager was HSBC.

This is an escalation in the issuance of environment-themed bonds. The largest issuer of environment-themed bonds remains the World Bank, with $1.3 billion, although the ADB has said that it expects to issue more climate and green-themed bonds.

ADB sells $232mil of its first clean energy bond
Posted: Oct 1, 2010 by Sean Kidney

The new edition of Carbon Management journal, published today, includes an Editorial by Prof. John Mathews and Sean Kidney on "Climate bonds: mobilizing private financing for carbon management".

'Carbon Management' journal editorial calls for Climate Bonds
Posted: Sep 22, 2010 by Sean Kidney

Responsible Investor journal reported last week that Alain Dromer, the new chairman of the the Association of British Insurers Investment Committee, had called for the re-activation of the securitisation markets to help develop environmental investment opportunities. Absolutely right.

“We want to work with the government to develop the right kind of environmental investment opportunities” he said. You can read the full speech here: Alain Dromer ABI speech. Note page 4 in particular.

British insurers call for green bonds
Posted: Sep 9, 2010 by Sean Kidney

The PACE (Property Assessed Clean Energy) program, strongly pushed by the US Department of Energy as the ideal financing model for residential solar panels and energy efficiency, is in trouble. It may have implications for the UK's PAYS scheme. The bonds are candidates to be called climate bonds.

PACE involves local authorities raising funds with special-purpose Municipal bonds, guaranteed by the federal government, to on-lend to households. Capital is provided to fund projects on demand. Climate Bonds Advisory Panel member Christoph Harwood calls this “buying a bond in tiny pieces”.

PACE bond-funded finance for residential microgen & EE crippled