Brazil Edition: Bonds & Climate Change: The State of the Market 2017

The State of the Market 2017 Brazil Edition 

The Brazilian labelled green bonds market has now reached $3.67bn thanks to national companies. From the inaugural issuance by BRF in June 2015 to September 2017, nine labelled Brazilian green bonds have been issued, five of them in the international market.

Brazilian bond issuance in Q1 and Q2 2017 reached a total of $288.4bn, with green bonds accounting for 0.2% (in comparison to the global bond market, green bonds made up 4% of issuance in the same period.

The State of the Market 2017 Brazil Edition also includes a deep analysis of the market and outlines the investment directions needed to finance Brazil’s low carbon growth in agriculture, forestry, renewable energy and the development of its urban transport sector and other climate smart infrastructure projects.).

Domestic green bonds are financing a diverse range of sectors:

  • Clean energy projects - 42% 
  • Agriculture and Forestry projects -  24%
  • Water - 13%
  • Buildings & Industry - 9%
  • Waste & Pollution - 8%
  • Transport & climate Adaptation - 2% each 

Another notable development is the level of heightened demand for Brazil green investment products by international investors highlighted in the response to recent green bonds issued by Klabin ($500m) and BNDES ($1bn). Both issuances were well oversubscribed and priced below estimate. This and other similar results are an indication that interest in green securities is strong and recent market development initiatives in Brazil have contributed to improve investor and market understanding of green bonds and their benefits.

Green bonds were created to fund projects and assets that have positive environmental and/or climate benefits. Although there is no specific regulation, best practice is for issuers to obtain international certification or contract an independent assessment of the green credentials of the assets to gain credibility with investors.

In Brazil:

Among the other findings, the report underlines a significant opportunity to finance the expansion of low carbon agriculture at scale, to increase the diversification of renewable energy sources and to develop resilient infrastructure to meet a new economic standard in the country.

Learn more: download the report here.

The Brazilian labelled green bonds market has now

reached $3.67bn thanks to national companies

the latest results in the second

Brazil Edition

of the

Bonds &

Climate Change

The State of the Market

2017

report. From the inaugural issuance by BRF in June 2015 to

September 2017, nine labelled Brazilian green bonds have been issued, five of th

em in the international market.

The global

State of the Market 2017

report is the flagship international stocktake of green finance and green bonds,

published annually by the Climate Bonds Initiative, commissioned b

y HSBC. Available in English & Portuguese,

Brazil

Edition

has been produced in partnership with the Inter-American Development

Bank (IDB) and the Brazil

s

sustainable finance expert SITAWI and is being launched today at the Sã

o Paulo headquarters of Mattos Filho

Advogados

,

accompanied by a live webcast

.

The report finds that Brazilian bond issuance in Q1 and Q2 2017 reached a to

tal of $288.4bn, with green bonds

accounting for 0.2% (in comparison to the global bond market, green b

onds made up 4% of issuance in the same

period.

The State of the Market 2017 Brazil Edition

also includes a deep analysis of the market and outlines the investm

ent

directions needed to finance Brazil

s low carbon growth in agriculture, forestry, renewable energy and the

development of its urban transport sector and other climate smart infrastructure

projects.

).

The State of the Market 2017 Brazil Edition

also finds domestic green bonds are financing a diverse range of sect

ors,

with clean energy projects accounting for the highest proportion at 4

2%. Agriculture and Forestry projects, second

highest at 24%, followed by Water at 13%, Buildings & Industry at 9%,

and Waste & Pollution at 8%. Transport &

climate Adaptation make up just 2% each, an indicator of the signific

ant headroom for investment in these areas.

Another notable development is the level of heightened demand for Brazil green

investment products

by

international investors highlighted in the response to recent green bonds

issued by Klabin ($500m) and BNDES

($1bn)

.

Both issuances were well oversubscribed and pric

ed

below estimate.

Th

is and other similar results are an

indication that interest in green securities is strong and recent market dev

elopment initiatives in Brazil have

contributed to improve investor and market understanding of green bonds and

their benefits.

Green bonds were created to fund projects and assets that have positive environmental

and/or climate benefits.

Although there is no specific regulation, best practice is for issuers to

obtain international certification or contract an

independent assessment of the green credentials of the assets to gain credibility wit

h investors. In Brazil, for

example, the four domestic bonds were evaluated by SITAWI and three of these

were also

Certified

under the

Climate Bonds Standard

.

Among the other findings, the report underlines

a

significant opportunity to finance the expansion of low carbon

agriculture

at

scale, to increase the diversification of renewable energy sources and to develop

resilient

infrastructure to meet a new economic standard in the country.

The Brazilian labelled green bonds market has now

reached $3.67bn thanks to national companies

the latest results in the second

Brazil Edition

of the

Bonds &

Climate Change

The State of the Market

2017

report. From the inaugural issuance by BRF in June 2015 to

September 2017, nine labelled Brazilian green bonds have been issued, five of th

em in the international market.

The global

State of the Market 2017

report is the flagship international stocktake of green finance and green bonds,

published annually by the Climate Bonds Initiative, commissioned b

y HSBC. Available in English & Portuguese,

Brazil

Edition

ha been produced in ptainable finance expert SITAWI and is being launched today at the Sã

o Paulo headquarters of Mattos Filho

Advogados

,

accompanied by a live webcast

.

The report finds that Brazilian bond issuance in Q1 and Q2 2017 reached a to

tal of $288.4bn, with green bonds

accounting for 0.2% (in comparison to the global bond market, green b

onds made up 4% of issuance in the same

period.

The State of the Market 2017 Brazil Edition

also includes a deep analysis of the market and outlines the investm

ent

directions needed to finance Brazil

s low carbon growth in agriculture, forestry, renewable energy and the

development of its urban transport sector and other climate smart infrastructure

projects.

).

The State of the Market 2017 Brazil Edition

also finds domestic green bonds are financing a diverse range of sect

ors,

with clean energy projects accounting for the highest proportion at 4

2%. Agriculture and Forestry projects, second

highest at 24%, followed by Water at 13%, Buildings & Industry at 9%,

and Waste & Pollution at 8%. Transport &

climate Adaptation make up just 2% each, an indicator of the signific

ant headroom for investment in these areas.

Another notable development is the level of heightened demand for Brazil green

investment products

by

international investors highlighted in the response to recent green bonds

issued by Klabin ($500m) and BNDES

($1bn)

.

Both issuances were well oversubscribed and pric

ed

below estimate.

Th

is and other similar results are an

indication that interest in green securities is strong and recent market dev

elopment initiatives in Brazil have

contributed to improve investor and market understanding of green bonds and

their benefits.

Green bonds were created to fund projects and assets that have positive environmental

and/or climate benefits.

Although there is no specific regulation, best practice is for issuers to

obtain international certification or contract an

independent assessment of the green credentials of the assets to gain credibility wit

h investors. In Brazil, for

example, the four domestic bonds were evaluated by SITAWI and three of these

were also

Certified

under the

Climate Bonds Standard

.

Among the other findings, the report underlines

a

significant opportunity to finance the expansion of low carbon

agriculture

at

scale, to increase the diversification of renewable energy sources and to develop

resilient

infrastructure to meet a new economic standard in the country.