Market Blog #4, 04-2018: First Marine Certified Bond: New issuers: Belgium, Chile, Indonesia, Spain: Updated
Q1 2018 figures
Latest annual conference interviews now on our YouTube Channel. Enjoy this lovely little 30sec clip "My mum
works at a bank & she issues green bonds". More in the Moving Pictures section.
Highlights:
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17 green bonds totalling USD6.3bn have been issued so far this month
ABN AMRO issues first green bond Certified under the Marine Renewable Energy Criteria of the Climate
Bonds Standard
First Belgian logistics real estate company enters the market
Republic of France taps Green OAT, increasing the bond size to almost EUR11bn
7 new issuers from 2017 reclassified and included in our green bond database following 2017reconciliation analysis
Updated Q1 2018 figures including Fannie Mae’s Green MBS deals: USD4.5bn for Q1
Green bond deals across the globe

2018 Issued

364 Bn38.5 Bn

USD Bn0

100

200

390 Bn300

400

Total Outsanding
500

Total Issued

Go here to see the full list of new and repeat issuers in April
Q1 GB figure now at USD30.7bn
Fannie Mae has published its list of Green MBS deals for Q1 2018, taking our quarterly figures to a total of
USD30.7bn, just 11% below Q1 2017 volume. Proceeds allocations are driven by Energy and Buildings, both at
29%, and Transport (22%). Fannie Mae’s issuance pushed the US to the top of quarterly country rankings at
USD6.2bn, followed by Belgium (USD5.7bn) and China (USD2.5bn).

>The full list of new and repeat issuers here.

Certified Climate Bonds
ABN AMRO (EUR750m/USD930m) is making waves, returning to the market for the third time issuing a 7-year
Certified Climate Bond. This time it’s the very first green bond to be certified under the new Marine Renewable
Energy Criteria of the Climate Bonds Standard! The new Criteria was launched in late 2017 and there’s moreissuance on the way.

Proceeds of the deal will finance mortgage loans for energy-efficient residential buildings and four offshore windprojects – a Netherlands North Sea project of 150 turbines and three Germany North Sea projects of 80, 54 and31 turbines.
Eligible categories under the Green Bond Framework also include commercial real estate loans for energy
efficient/sustainable buildings, loans for buildings energy efficiency upgrades of at least 30%, renewable energy
and loans or investments for circular economy projects/assets.
Oekom provided the Pre-Issuance Verification Statement.

New issuers
WDP (EUR100m/USD12m), Belgian logistics real estate company, issued an 11-year US private placement. Thisis the first green US private placement from a Belgian company and the second green bond from the logistics
sector. Proceeds are earmarked for onsite renewable energy, green buildings with threshold certification levels of
BREAM “Very Good” or LEED “Gold”, recycling, clean transport infrastructure and water management. In its
Second Party Opinion, CICERO assessed the green buildings category at “Medium to Light Green” partly because
the eligibility criteria do not specify energy efficiency thresholds (in addition to certification levels).

Climate Bonds view: We welcome increased issuance from the logistics sector. Setting green building
certification requirements on the higher end of the scale is best practice. We agree with CICERO that combining
this with minimum thresholds for energy efficiency improvements would improve the buildings’ green
credentials.
Klövern (SEK900m/USD107m), a Swedish property company, issued a 4-year green bond to finance new andexisting building projects. The deal benefits from CICERO’s Second Party Opinion. Certification thresholds for new
constructions and major renovations are set at Miljöbyggnad Silver, LEED Gold, BREEAM SE Very Good, or
BREEAM Very good, combined with energy performance improvements of at least 25% of Swedish building
regulation. Building refurbishments must also yield an energy performance of under 100 kWh/m2 or at least 25%
reductions in energy use. The green bond framework lists a range of project types that qualify under thiscategory, such as onsite renewables, LED lighting, assets related to clean transport such as electric charging
stations, recycling, and terrestrial and aquatic biodiversity conservation.

Climate Bonds view: Green building certification thresholds and minimum energy efficiency improvements of
25% are aligned with best practice.

Jernhusen AB (SEK500m/USD59.5m), a Swedish real estate company focused on the transport sector, issued
a 5-year green bond. Proceeds will be allocated to renewable energy, new/existing green buildings withcertification levels of Miljöbyggnad “Gold”/ “Silver” or equivalent, freight and passenger transport infrastructure
and waste management. The deal benefits from Sustainalitycs’ Second Party Opinion.

Climate Bonds view: Miljöbyggnad “Gold” is the highest certification and aligns with best practice in the market.
We hope to see improvements in existing buildings matching this ambition level going forward.

Pace Funding Group (USD50m),California, issued a PACE ABS secured on a pool of residential PACE loans
which finance property improvements related to energy efficiency, water efficiency and renewable energy
installations.

Climate Bonds view: It’s good to see the pool of PACE ABS issuers expanding. It would be good to see PACE ABS
issuer commit to ongoing impact reporting.
Zhejiang Huayou Cobalt Co (CNY620m/USD99m),China’s largest cobalt chemicals producer, issued a 3-year
green private placement bond. According to the news release, all proceeds will be used for the recycling ofbatteries and cobalt waste, efficiency improvement of wastewater treatment and comprehensive utilization ofrenewable resources. The deal benefits from an Assurance report from Pengyuan Credit Rating, however the
document is not publicly available.

Climate Bonds view: Waste recycling and water treatment are aligned with both PBoC’s Green Bond Project
Catalogue and the Climate Bonds Taxonomy. However, we do encourage issuers to disclose detailed project
information to increase transparency.

Zhuhai Huafa Comprehensive Development (CNY1bn/USD159m),China, issued a 5-year green bond that
benefits from an Assurance report from Lianhe Equator (not publicly available). 94% of proceeds will be used tofinance and refinance a commercial building located in the coastal city of Zhuahai. It has received the China Green
Building Evaluation Standard 2-Star certification. The other 6% will be used to build an urban wetland park, which
is designed to absorb excess rainfalls during storms and reduce flooding in cities.

Climate Bonds view: In China, 30 cities have signed up to the Sponge Cities Initiative which aims to ensure that
80% of each city features enough wetlands to absorb 70% of storm water runoff by 2030. With the massive scaleof urbanisation happening in China, municipalities need to take climate resilience into consideration for new
urban infrastructure at design stage. We hope to see more green bonds issued by the China’s local government,water authority, or state-owned enterprise in the future.

Sihui Rural Commercial Bank (CNY100m/USD15.93m),China, issued a 3-year green bond. Funds are to beallocated to 5 waste recycling projects with design recycling capacities of 1 million tons of waste metal, 2000t ofelectrical motor, 30m tons of waste cable, 1460t of plastic and 4000t of aluminium respectively. The issuer also
intends to finance the purchase of 36 public buses, flood control and air pollution prevention. Golden Credit
provided the Assurance report.

Climate Bonds view: Although we see metro or light rail as preferable to buses for urban transit, the issuer’s
detailed disclosure on the intended allocation and expected impact is encouraging. We agree on the positive
climate impact that will be delivered by the 36 public buses, including providing 4.3m passenger trips andavoiding 4132t coal equivalent and a carbon emissions reduction of 10166t.

Aguas Andinas (CLF1.5m/USD68m), Chile’s largest water utility, issued a 7-year Green and Social Bond in
mid-March, becoming the first Chilean green bond issuer from the water sector. The bond is listed on the Greenand Social segment of the Santiago Stock Exchange and benefits from an SPO from Vigeo Eiris. Proceeds will beallocated to financing water supply, resilient infrastructure and sanitation projects in the City and Metropolitan
region of Santiago.

Climate Bonds view: Improving the efficiency of water and wastewater infrastructure is a key aspect in ensuring a
region’s resilience to climate change. We’d like to see to see more water and wastewater companies adopting
robust reporting metrics. We note that ICMA published its Suggested Reporting Metrics for Sustainable Water
and Wastewater Management Projects in 2017.

ACS SE (EUR750m/USD922.4m),a Spanish infrastructure company, issued an 8-year green bond and wasawarded an E1/83 Green Evaluation from S&P Global Ratings. 59% of proceeds will be allocated to renewableenergy, 20% to energy distribution, 12% to water management (including desalination) and 9% to lighting
upgrades. Funded projects and assets are located across North America, South America, Asia and Africa.

Climate Bonds view: We are aware that desalinisation projects can be energy intensive and efforts to reduceenergy consumption or the amount of water treated is important to limit emissions. However, as noted by S&P in
the Green Evaluation, these projects will lead to system improvements in Africa, Peru and the UAE which are highwater stress regions.

Star Energy Geothermal (Wayang Windu) Ltd (USD580m)issued a 15-year green bond, becoming the third
Indonesian green bond issuer and the first from the geothermal energy sector. The deal benefits from Carbon
Trusts’ Second Party Opinion. Proceeds will be used to finance the Wayang Windu Geothermal power plant andspecifically assets with emissions of less than 100g CO2 per kWh estimated carbon intensity. Carbon Trust notesthat this compares favourably to the Indonesian national average emission factor for electricity of over 730g CO2
per kWh.

Climate Bonds view: The carbon intensity threshold set by the issuer is aligned with the Geothermal Criteria of
the Climate Bonds Standard, which demonstrates a high level of ambition.

Previously treated as excluded, pending or unlabelled
During our screening process, green bonds that are not aligned with the Climate Bonds Taxonomy are excluded
from our green bond database. If satisfactory information to the contrary is provided by the issuer, arranger,
underwriter or external reviewer, the bond will be reclassified as included. Where available information on adeal’s use of proceeds is insufficient to determine whether the bond should be included or excluded, it is marked
as “Pending” and further work is undertaken to obtain or clarify information. Bonds that have a green bondassessment, green evaluation or other form of green rating are now uniformly treated as labelled green bonds.
At the end of each quarter we review unlabelled, pending and excluded deals to determine which ones should bereclassified as included. Deals from new issuers from 2017 and Q1 2018 that have been reclassified in our latest
quarterly review are described below.
Hitachi Capital Management China (USD100m) issued a 5-year green bond in December 2017. The second
party opinion provided by DNV GL reflects proposed allocations to water treatment and water use efficiency
upgrades, solar PV, construction and upgrades of BEAM certified green buildings, and circular economy adapted
production technologies and processes.

Climate Bonds view: The bond had been excluded from our database in January due to lack of clarity on circular
economy related projects. Information provided by Mizuho, Green Structuring Agent and sole underwriter of thedeal, confirms that the issuer has already invested over USD100m in projects under the water, renewables andgreen buildings categories of the green bond framework. Based on this information we have reassessed the bondand are satisfied that the proceed allocation is aligned with the Climate Bonds Taxonomy.

Hong Kong & China Gas (JPY2bn/USD18m) issued a 10-year green bond in November 2017. The deal wasissued to finance wastewater treatment, waste treatment, landfill gas conversion to natural gas, biomass
conversion to biofuels and other projects related to renewable energy production and energy performance
improvements. The Green Bond Framework states that nuclear energy and energy efficiency improvements
related to fossil fuel technologies are excluded from the eligible projects. The bond benefits from an SPO by
Sustainalytics.

Climate Bonds view: The deal had previously been classified as pending due to insufficient information on
proceed allocation. We have now reassessed the deal taking into account the Green Bond Framework and SPO
and can confirm that the eligibility categories are aligned with the Climate Bonds Taxonomy.

Greater Orlando Aviation Authority (USD924m), Florida, issued a US muni bond in October 2017 andachieved a Green Evaluation score of E1/78 from S&P Global Ratings. The bond was issued to finance theconstruction of five new buildings (including additional terminal space and car park extension) and enabling
works, and part of the South Terminal Complex project at Orlando International Airport. The buildings will be built
to comply with the LEED Version 4 standards and are expected to obtain the Certified level of LEED ratings, whichis the lowest of four levels. The issuer aims at achieving a 20% energy efficiency improvement compared toexisting buildings.

Climate Bonds view: Targeting minimum levels of LEED certification is unambitious, especially in comparison to
Mexico City Airport which is targeting LEED Gold and Platinum certification levels for the upgrades funded by its
two green bonds. The additional energy efficiency target provides some assurance on the energy performancecredentials of the buildings, but is on the low side: we prefer to see 25-30% or higher targets.
Market best practice is now set on the higher end of the scale for building certification. Climate Bonds is in theprocess of developing more stringent eligibility requirements for including building-related bonds in its database.

Capital Region Water (USD44m), Pennsylvania, issued a US muni bond in May 2017 and it was awarded an
E1/87 Green Evaluation by S&P Global Ratings. Proceeds will refinance 2014 revenue bonds mainly funding theAdvanced Wastewater Treatment Facility (AWTF) Improvement Project, as well as other improvements to waterand storm water management, wastewater treatment and water quality improvements.

Climate Bonds view: It’s good to see water and wastewater mitigation, adaptation related projects leading to
improvements in the efficiency of the system and increased water quality.

Argo Infrastructure Partners (USD120m), New York, issued an unlabelled bond in August 2015 to fund part of
the acquisition of the Cross-Sound Cable project. In May 2017, the deal obtained an E1/87 Green Evaluation from
S&P Global Ratings. The project consists of an undersea cable transmitting power generated from renewableenergy sources (mainly wind and hydro) from New England to Long Island and enhancing grid stability. S&P notedthat the issuer has not set a timeline for reporting emissions reductions, but had engaged market consultant ESAI
who calculated that the project’s carbon savings are equivalent to around 600MW of wind capacity.

Climate Bonds view: Grid infrastructure connecting renewables and substituting fossil fuel energy sources are
essential assets to achieve decarbonisation. We hope to see regular and robust reporting.

Brookfield Power NY Finance (USD305m), Canada, issued a 23-year bond in December 2017 and obtained an
E1/91 Green Evaluation from S&P Global Ratings. The deal was issued to refinance a portfolio of 78 hydroelectricfacilities located in New York, Pennsylvania, Maryland, and West Virginia with a total installed capacity of
872MW. Two thirds of the proceeds were allocated to refinancing small hydro.

Climate Bonds view: Refinancing hydro is in line with our current database eligibility criteria, but we would like to
see issuers reporting power density and emissions values.

Ence Energia (EUR220m/USD258m), Spain, issued a project finance loan in December 2017 with the benefitof a Green Evaluation score of E1/79 from S&P Global Ratings. Proceeds will be used to refinance existing debt
and finance the expansion of the issuer’s biomass energy business. Part of the loan will finance the acquisition ofa biomass complex with a combined generation capacity of 27MW in Andalucía.

Climate Bonds view: The issuer is committed to sourcing only sustainable biomass, which aligns to our taxonomy.
Repeat issuers
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Atrium Ljungberg: SEK500m/USD59.5m
Bazalgette Finance: GBP150m/USD213.6
Berlin Hyp: EUR500m/USD620.5m
BNP Paribas: EUR500m/USD620.5m
Fabege AB: SEK500m/USD59.8, SEK200m/USD54.4m
IFC: SEK500m/USD60m
New York State Housing Finance Agency: USD68.9 (Certified Climate Bond)
Republic of France: EUR1.2bn/USD1.3bn (tap)•

Fannie Mae published their Green MBS numbers for Q1 2018 last week: DUS MBS USD4.3bn, Credit
Facility USD147m (not included in repeat issuers chart below)

Solar Mosaic: ABS, USD235m

Swedbank: SEK2bn/USD244m
Vasakronan: SEK1bn/USD118m
Yiwu State-Owned Capital Operation: CNY700m/USD112m

Repeat issuers account for 71% of issuance

0

1

2

Solar Mosaic
Atrium Ljungberg
YIWU STATE OWNED ASSET
IFC

3

4

Vasakronan
ABN AMRO
Berlin Hyp
Republic of France

56
7
USD Billions

Fabege AB
Bazalgette Finance
BNP Paribas
New Issuers

Q1 trends comparison

Quarterly volume by issuer type

Quarterly use of proceeds - Evolution
100%

20

80%

USD Billions

30

ICT
Industry
Adaptation
Land Use

60%

10

Waste

Q1 2017
Loan
Government-backed entity
Development bankFinancial corporate

Q1 2018
Sovereign
Local governmentNon-financial corporateABS

USD Billions

40%

0

Water
Transport

20%

Buildings
Energy0%
Q1 2017

Q1 2018

Pending and excluded bonds
We only include bonds with at least 95% proceeds dedicated to green projects that are aligned with the Climate
Bonds Taxonomy in our green bond database. Though we support the Sustainable Development Goals (SDG)
overall and see many links between green bond finance and specific SDGs, the proportion of proceeds allocatedto social goals needs to be no more than 5% for inclusion in our database.
Issuer Name

Amount issued

Issue dateCouncil of Europe Development BankBPCE

EUR500m/USD614m
JPY49.4bn/USD451m,
JPY2.3bn/USD21m
EUR2bn/USD2.5bn
CNY2bn/USD315.7m
CNY700m/USD111.3m
CNY1bn/USD158.1m
CNY1bn/USD157.9m
CNY800m/USD127.2m

27/03/2018
25/01/2018

Reason for exclusion/
pending
Sustainability/Social bond
Sustainability/Social bond13/03/2018
19/03/2018
26/03/2018
21/03/2018
19/03/2018
26/03/2018

Sustainability/Social bondNot aligned
Working capital
Working capital
Working capital
Not aligned

EUR288m/USD318.4m
USD25m
EUR0.8m/USD1m
EUR10m/USD12m,
EUR2.5m/USD2.9m
USD150m
USD40m11/10/2016
19/10/2017
04/12/2017
22/12/2017

Sustainability/Social bondInsufficient information
Insufficient information
Insufficient information

11/12/2017
29/12/2017

Insufficient information
Insufficient information

CNY1bn/USD156m
SEK100m/USD12m
EUR100m/USD123.4m
SEK1.3bn/USD152.1m,
SEK1.3bn/USD152.1m
USD100m
CNY100m/USD15.9m
EUR575m/USD707.3m,
EUR225m/USD276.8m
CNY2bn/USD308m

19/01/2018
28/12/2017
19/03/2018
21/03/2018

Insufficient information
Pending
Pending
Pending

23/03/2018
29/03/2018
29/03/2018

Pending
Pending
Pending

04/01/2018

PendingLand NRW
Weihai City Commercial Bank Co LTD
Hesteel Co LTD
Shaanxi Financial Holding Group Co LTD
Yancheng South District Development
Hubei Western Area Eco-cultural
Tourism Investment co., Ltd
Meridiam
Credit Agricole CIB
Credit Agricole CIB
Credit Agricole CIB
BDO Unibank
Virginia Small Business Financing
Authority
SPIC Ronghe Financial Leasing
IFC
Verbund AG
Kungsleden AB
Banco Galicia
Linhai Rural Commercial Bank
PaprecEXPORT-IMPORT Bank of China
Green bonds in the market
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Rhode Island Infrastructure Bank – closing 25th April
District of Columbia Water -closing 30th April
EIB – closing 25th April
World Bank – closing 26th April
City of Tampa, Florida – closing 26th April
Zuricher Kantonalbank – closing 8th May

Investing News
Luxembourg Stock Exchange and Shanghai Clearing House have agreed on a mechanism that will enableinternational investors easier access China’s green bond market.
Fiji lists its first international green bond on the LSE.

Abu Dhabi hosted the world’s first Green Business Summit.
BNP plans an emerging markets green bond fund.
Gecina concludes first sustainability performance-linked loan indexed on its GRESB Rating.
Copenhagen Infrastructure III (CI III) fund closes at USD3.5bn.

Lots of Green Gossip
Lithuania’s government announces plan to issue a sovereign green bond.
Hanover City plans to launch a Green Schuldschein – it would be the first German city to issue a green bond.
City of Toronto has obtained a Sustainalytics' second party opinion to looks set to bring a green bond to market.
Japanese company Nippon Yusen Kaisha (NYK) to plans to issue the first green bond where proceeds will beallocated to projects/assets in the shipping industry.
Taipower aims to return to market with more green bonds in mid-May.
Mendoza Province is set to issue green bonds, becoming the third Argentinian province to come to market.
Empresa de Energía del Pacífico is planning to issue green bonds.
Caisse Francaise de Financement Local and La Banque Postable state their intention to issue green bonds in 2019.
Kenyan fund plans to issue a USD15m green bond to finance water projects.
Barclays plans to launch UK’s first green mortgage.

Reading and Reports
The UNEP Enquiry into the Design of a Sustainable Financial System has released its final report. Don’t miss“Making Waves”.
The UK Green Finance Taskforce has published its latest report.
United Nations International Maritime Organisation adopted an initial strategy to curb emissions frominternational shipping.
Climate Landscape for Aotearoa New Zealand is another pointer to the growing interest in green finance from the
Shaky Isles.
Our CEO Sean Kidney makes an impression in Mexico:
Inversionistas cierran filas ante cambio climático
México, el ausente en bonos soberanos verdes

Moving Pictures
Latest annual conference interviews now on our YouTube Channel:•••

Choose your future: “My mum works at a bank & she issues green bonds” O: 30secs
Choose your future: “My aunt helps people make buildings for the cities of the future” 0:31secs
Ruurd Brewer from TCX: “Emerging markets, currency risk & hedging.”2:33secs.

•Christiana Figures: “Green Bond Pledge, the 2020 Milestone and green infrastructure” 3:08secs.

‘Till next time,
Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate
Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment product is for
information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no
responsibility for content on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt instrument orinvestment product and no information within this communication should be taken as such, nor should any information in thiscommunication be relied upon in making any investment decision.
Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt
instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national or internationallaws.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an
individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based inwhole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.