November was the best month ever for green bonds as the total issuance reached USD 7.92 billion (EUR 7.3bn). The Climate Bonds Initiative (CBI) calculates that a bit over USD 40 billion have been issued since January, so 2015 has for sure surpassed 2014’s USD 36.6 billion.
October and November have been the strongest months this year in terms of green bond issuance. Many hope that trend would continue in December too, now that all eyes are turned on Paris and the COP21 climate conference.
BIG BONDS FOR RENEWABLES
Dutch bank ING (AMS:INGA) launched its inaugural green bonds in November, adding up to USD 1.33 billion. It issued a EUR-500-million bond with 0.75% coupon and five-year tenor, and another USD-800-million bond with a 2% coupon and three-year tenor. Both were heavily oversubscribed. The bank will use approximately 41% of the proceeds to finance three solar and six wind projects, both on- and offshore.
Southern Power issued USD 1 billion worth of green bonds in November to support eligible renewable energy projects in the US, mainly solar and wind parks. More specifically, it issued two bonds of USD 500 million each. One bond offers a 1.85% coupon at two-years tenor, whereas the other offers 4.15% coupon maturing in 10 years.
German sovereign development bank KfW issued an additional USD 1 billion in November under its green bond programme that funds renewable energy and energy efficiency. The latest bond has a coupon of 1.875% and five-year tenor.
The European Investment Bank (EIB) announced that it is issuing a EUR-500-million bond composed of a Climate Awareness Bond linked to the Ethical Europe Climate Care Index. The proceeds will go to finance renewable energy and energy efficiency projects.
France’s Societe Generale (EPA:GLE) issued its first “Positive Impact Bond” for renewables and public transport. The inaugural green bond, of EUR 500 million, received EUR 3.1 billion in orders. It offers a 0.75% coupon with five-year tenor. About 80% of the proceeds will go to support hydro, geothermal, wind, solar and biomass projects.
HSBC (LON:HSBA) issued an inaugural green bond of EUR 500 million (USD 528m) for renewable energy, energy efficiency, sustainable waste management, sustainable land use, clean transportation, sustainable water management and climate adaptation projects.
Germany-based NRW Bank issued its third green bond, of EUR 500 million, aligned with Climate Bonds Initiative wind energy standard. It bears a coupon of 0.875% and has a 10-year tenor. The CBI says there was strong demand for the bond with the order book exceeding EUR 500 million within 45 minutes. About 80% of the proceeds will be used for climate mitigation projects and 20% will go to adaptation projects.
Early in November, the City of Paris issued an inaugural EUR-300-million green bond for renewable energy (with a focus on geothermal, solar, energy recovery and heating network), low-carbon transport, energy efficiency and climate adaptation. It bears a 1.75% coupon and has a 16-year term.
There were also several smaller issuances such as the NOK-500-million (USD 58m/EUR 53.6m) green bond by Norwegian solar energy company Scatec Solar, and Vermont University’s USD-18.5-million green bond for geothermal heating and energy efficiency at new green buildings.
GOOD NEWS IN INDIA
The CBI lauded the plan of India’s financial services regulator to create regulations for the green bond market. The Securities and Exchange Board of India (SEBI) is to formulate rules and incentives for domestic green bonds. One of its goals is to make it cheaper to issue green than non-green bonds. The criteria are yet to be determined.
(USD 1 = EUR 0.925)
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