Market Blog #34 - 22/10/19: Acorn Holdings issues Kenya’s 1st GB: UAE, world’s largest
concentrated solar project - Certified Climate Bond: Big US hotel REIT enters GB market:
GB gossip, long reading list and more!

Highlights:●

Monthly GB issuance as of 18 October reached USD11.4●

Kenya: Acorn Holdings’ debut GB, Certified under the Low Carbon Buildings Criteria●

UAE: Noor Energy 1’s CSP project with 700MW design capacity due for completion in 2022 funded with CCB●

USA: Host Hotels & Resorts becomes first US lodging REIT to issue GB, opening up US issuance potential

Don’t miss!
The Green bond market summary Q3 2019 provides an overview of green bondissuance, as well as the wider labelled market. The spotlight sections this time
are on blue bonds and blue economy, and on green loans. The report also
features underwriter and listing venue league tables for Jan-Sep 2019.
Q3 2019 issuance is 87% higher than Q3 2018, and 2019 quarterly issuance has
been consistently higher than 2018. Financial corporates led the way in Q3 with
24% of total quarterly volume. Emerging market issuance represented 26% of
Q3 2019 volume, with strong issuance from LAC, bringing Q1-Q3 2019 EM
issuance, including supranationals, to USD51.7bn (Jan-Sep 2018: USD32.5bn).
The Green Bond Pricing in the Primary Market January - June 2019 monitors the performance of 46
EUR and 15 USD denominated benchmark size green bonds with a total value of USD56.6bn issued
during H1 2019. 12 GBs priced with new issue premia, 15 priced on their curves, and 6 exhibited agreenium: EIB 2042, Terna 2026, Vodafone 2026, KfW 2027, Netherlands (Sovereign) 2040 and Chile(Sovereign) 2050. In spotlight studies of TenneT, Vodafone and development banks KfW and NRW
positive pricing differentials between green and vanilla bonds in the sample were observable.
Greening the Financial System: The role of Central Banks and Financial Regulators highlights the rolethat Central Bank and Financial Regulators can play in incorporating climate change risk into thefinancial system. This report recommends that central banks should develop a brown taxonomy, theirasset purchasing programmes should be skewed towards buying green assets, and they should test
whether green supporting factors could be applied to offset some of the impact of using the brown
penalising factors to encourage investment in green technologies.
Comparing China’s Green Bond Endorsed Project Catalogue and the Green Industry Guiding Catalogue
with the EU Sustainable Finance Taxonomy (Part 1) provides a preliminary analysis on China's Green
Bond Endorsed Project Catalogue, the Green Industry Guiding Catalogue and the EU Sustainable
Finance Taxonomy in terms of their guiding principles, users, classification and screening criteria.
Available in English and Chinese. 同时提供英文版及中文版.

The Climate Bonds Initiative has expanded the list of cities and countries where
Certification for debt financing Low Carbon Buildings (LCB) – commercial, residential andretrofits – is available. LCB Certification is now available in multiple markets including
Australia, Singapore, USA, China, Mexico, New Zealand, Europe and Korea. Relevant local
proxies and measures have already been used for Certifying Green Bonds.

Green bond deals across the globe: 1 Jan – 18 Oct 2019

> The full list of deals here.

At a glance
Green bond issuance as of 18 October, brought total 2019 GB issuance to USD199.3bn with USD11.4 bn for the month sofar, roughly 70% of last year’s October’s issuance.
The Top 3 country ranking for October as of this date features Ireland (USD2.2bn), USA (USD1.8bn) and Spain (USD1.2bn).
Large deals drive the high ranking for Ireland and Spain. Ireland’s issuance came from a tap of the National Treasury
Management Agency green Sovereign, and is the month’s largest deal at EUR2bn/USD2.2bn. Spain’s volume came fromtwo deals: Banco Santander with EUR1bn/USD1.1bn and Acciona with EUR108m/USD119m. In contrast, USA volume was
generated by 10 different issuers.
Developed markets accounted for 74% of issuance and EM for 17%. For the latter, largest contributor was again China,
with USD963m from China Construction Bank Corporation and Bank of China.
Financial corporates accounted for 35%
of overall issuance for 1-18 October,while for October 2018 they made up
only 17%. There was a variety of deal
sizes ranging from JPY10bn/USD93m(Ricoh Leasing Company, Japan) to
EUR500m/USD549m (SR Boligkreditt,Norway) and EUR1bn/USD1.1bn (Banco
Santander, Spain).
Non-financial corporates come in second
with 23%, closely followed by Sovereigns
at 19% market share for the month.

Almost half the proceeds raised are earmarked forEnergy assets and projects (48% of current
October volume), with 14 deals dedicating 100% of
the proceeds to renewables, the single largest deal
from Banco Santander.
Low-carbon Buildings are financed by 19 different
deals, attracting USD3.1bn, while 11 deals raised
funds for Transportation assets and projects.
We saw 9 debut issuers, bringing the total numberof new GB issuers in 2019 to 192 (2018, full year:
222). Repeat issuers accounted for 76% ofmonthly volume through 18 October.

> The full list of new and repeat issuers here.
> Click on the issuer name to access the new issue deal sheet in the online bond library.

Certified Climate Bonds
Acorn Holdings (KES4.3bn/USD41.5m), Kenya, issued an inaugural 5Y green bond that is Certified against the Low Carbon
Building Criteria of the Climate Bonds Standard. It is the first GB issuer from Kenya. The proceeds will be used to financethe construction of residential buildings across 6 developments in Nairobi, which will provide several thousand rental
housing units for students and young professionals. The buildings have received EDGE Certification and, therefore, meetthe requirements of the Low Carbon Buildings (Residential) Criteria.
The issuer will provide quarterly report on the allocation of proceeds to bondholders until full allocation. The reports will
also include key impact indicators such as estimated ex-ante annual energy consumption (KWh/m2), estimated annual
GHG emission reductions (tCO2), water savings and other efficiency improvements.
Acorn Holdings has focused its activities on developing good quality rental accommodation for students and young
professionals in Nairobi since 2015.

SR Boligkreditt AS (EUR500m/USD549m), Norway, came to the market with a 7-year covered bond, Certified against the
Low Carbon Buildings Criteria of the Climate Bonds Standard.
The proceeds will be used to finance and refinance mortgages related to residential buildings in Norway, which satisfy atleast one of multiple Criteria such as refurbished buildings with 30% reduced energy consumption.
A report with details on the allocation of proceeds will be produced annually, until all the proceeds have been allocated.
These reports will be publicly available.

Certified debt issued prior to October
Noor Energy 1 JSC (USD2.69bn), UAE, obtained a 7Y project finance loan in January, which was Certified against the Solar
Criteria of the Climate Bonds Standard in October. Noor Energy is a project SPV set up by ACWA Power, a Saudi Arabian
power generation and water desalination facility developer and owner with assets primarily across the Middle East andNorth Africa region, working in collaboration with the Silk Road Fund (China) and the Dubai Electricity and Water Authority(UAE). This is the first Certification to come from the Middle East region, and an OPEC member country.
When completed in 2022, this will be the largest Concentrated Solar Power (“CSP”) facility in the world, with a design
capacity of 700MW. This development is the fourth phase of the Mohamed bin Rashid Solar Park, which is due tocomplete development in 2030, with a final design capacity of 5GW.

Annual reports will be made available to the lenders and the Climate Bonds Initiative. These reports will include details of
the allocation of proceeds, the amount of installed generation capacity and the estimated avoided GHG emissions.

Redstone Solar Thermal Power Plant (ZAR8bn/USD567m), South Africa, obtained a 17Y loan in July, which was Certified
against the Solar Criteria of the Climate Bonds Standard in October. The proceeds will refinance the development of the
Redstone Solar Thermal Power Plant, which was jointly developed by ACWA Power (Saudi Arabia) and SolarReserve (USA)and became operational in late 2018.
The Concentrated Solar Power plant is located in Postmasburg, in the Northern Cape province of South Africa. It has an
installed capacity of 100MW and it is one of the largest renewable electricity generation plants in South Africa.
Annual reports will be produced and made available to the lenders and the Climate Bonds Initiative. These reports will
have details about the project, including quantitative indicators such as the amount of electricity generated.

New issuers
Public sector
October saw debut issuance from three local governments and two government-backed entities. All the proceeds ofthe bonds issued by local governments will go towards water and wastewater projects, while Franklin Township Sewer
Authority will fund just wastewater facilities. The Regents of the University of Colorado will invest in low carbon building
projects. None of the issuers state any reporting commitments.
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City of Hot Springs, Arkansas (USD5m), USA, 20Y original term, assurance provided by BAM GreenStar.
City of Oakland Park (USD10.7m), USA, 20.9Y original term, no third-party review.
Harris County Municipal Utility District No1 (USD2m), USA, 19.9Y original term, assurance provided by BAM
GreenStar.
Franklin Township Sewer Authority (USD2m), USA, 19.2Y original term, assurance provided by BAM GreenStar.
The Regents of the University of Colorado (USD215m), USA, 34.7Y original term, no third-party review.

Climate Bonds view: We welcome the debut issuers with Arkansas’ third and Florida’s sixth Municipality now entering thegreen bond market. It’s encouraging to observe more and more municipalities gaining assurance, usually BAM GreenStar.
We encourage allocation and impact reporting in order to improve transparency for investors and other stakeholder
groups.

Financial corporates
Two financial corporates have come to the green bond market in October so far.

Assicurazioni Generali (EUR750m/USD819m), Italy, 11Y original term, SPO provided by Sustainalytics. The senior
subordinated bond can fund a variety of projects across sectors (energy, transport, buildings, water, waste)
Climate Bonds view: Generali has provided quite a lot of detail around the specific sectors it is financing, which is positive.
We have seen limited issuance from insurance providers, so hopefully this will tempt other large financial institutions toincrease green finance and issue green bonds.

Banco Santander (EUR1bn/USD1.1bn), Spain, 7Y original term, SPO provided by Vigeo Eiris. This debut senior nonpreferred green bond will finance solely renewable energy projects.
Climate Bonds view: Santander has a significant portfolio of renewable energy project finance which would clearly be
eligible for green bond financing. We expect further issuances, not least due to Santander’s ambitious sustainable/green
finance plans, and hope that this expands to other projects, including new infrastructure given the bank’s strong presencein Latin America.

Non-financial corporates
So far in October there have been two inaugural issues by non-financial corporates: AES Gener and Ficolo.
AES Gener (USD450m), Chilean subsidiary of AES Corporation (USA), 59.5Y original term, private placement, SPO
provided by Sustainalytics. The proceeds will fund renewable energy projects including energy storage. The issuer
intends to publish an annual Green Bond Report on its website containing allocation and impact information.
Climate Bonds view: This is the first GB from an energy producer in Chile, a country with just over 20% of its energy mix
from renewable sources and intentions to grow this share. AES Gener is one of the largest energy companies in Chile andits intentions to spend the proceeds not just on wind and solar farms but also on battery technology is promising.

Ficolo (EUR20m/USD21.8m), Finland, 4Y original term, SPO provided by CICERO. Ficolo will invest in the construction
and acquisition of data centers (or companies that operate them) and are operated solely by renewable energy. The
issuer will provide information once a year on the website including information such as the power usage effectivenessratio on an individual data center level and their environmental policy.
Climate Bonds view: Ficolo joins the green bond market as the 6th issuer from Finland. The bond marks two firsts for the
Finnish GB market: the first green bond to be issued by a privately-held company and the first green high yield instrument.
ICT financing is still rare in the green bond market and it is encouraging to see new issuers, especially where 100% of theproceeds are dedicated to this purpose and especially since the data centres are entirely powered by renewable energy.
Way to go!
Visit our Bond Library for more details on October deals.

Bonds issued before October 2019
China Jinmao Holdings Group Limited (USD250m), formerly Franshion Brilliant Ltd, a Hong Kong property subsidiary
Sinochem Corporation (China), 5Y original term, came to the market in June with a senior secured bond that benefits froma second party opinion provided by Sustainalytics. The proceeds of the bond will be allocated to low carbon buildings andrenewable energy (wind and solar) projects. An annual green finance report will be published, containing information suchas allocation of proceeds to eligible projects and unallocated proceeds. An impact report will disclose indicators such as
number and level of third-party certification(s) achieved and CO2 (or other GHG) emissions avoided.

Host Hotels & Resorts (USD650m), USA, 10Y original term, debuted in the green bond market in September and is the first
US lodging REIT to issue green bonds. The proceeds will finance the acquisition and development of hotels that havereceived or are expected to receive LEED Silver, Gold or Platinum certification, as well as refurbishments to properties inorder to significantly improve energy efficiency and/or water efficiency. The deal will refinance the acquisition of Andaz
Maui and the 1 Hotel South Beach, each of which has received LEED Silver certification. Host Hotels has committed toannual reporting, available on its website, until full allocation of proceeds, and this will include the LEED levels achieved.

Repeat issuers – 1 to 18 October
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AES Gener (AES Corporation): USD450m
Acciona: EUR108.4m/USD118.9m
Adani Renewable Energy RJ Ltd. (Adani Green Ltd.): USD362.5m
Advanced Semiconductor Engineering: USD300m
Bank of China: USD350m – Certified Climate BondBank of China: EUR300m/USD330.7m – Certified Climate BondBank of China: CNY2bn/USD282.5m – Certified Climate BondEIB (European Investment Bank): USD1bn

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Energy Absolute PCL: THB3bn/USD98.5m – Certified Climate Bond
Hemfosa Fastigheter AB: SEK800m/USD81.2m
Humlegarden Fastigheter AB: SEK2bn/USD203m
ING Bank Hipoteczny S.A. (ING): PLN400m/USD101.5m – Certified Climate Bond
Indiana Finance Authority: USD41.55m
Indiana Finance Authority: USD215m
Japan Housing Finance Agency: JPY10bn/USD92.9m
Japan Housing Finance Agency: JPY20bn/USD185.8m
MidAmerican Energy: USD250m
MidAmerican Energy: USD600m
Mitsubishi UFG: AUD400m/USD270.1m
Mitsubishi UFG: AUD100m/USD67.5m
NRW.Bank: EUR500m/USD551.3m
National Treasury Management Agency: EUR2bn/USD2.2bn
Renew Power: USD90m – Certified Climate Bond
Reykjavik Energy: ISK2.7bn/USD21.8m
Ricoh Leasing Company: JPY10bn/USD92.9m
SNCF: EUR250m/USD272.7m – Certified Climate Bond
Vasakronan: SEK200m/USD20.4m
Vellinge Municipality: SEK200m/USD20.4m
World Bank (IBRD): INR220m/USD3.1m

Repeat issuers: Jan – 18 October 2019 (not previously included)
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Credit Agricole CIB: USD10m - September 2019
MidAmerican Energy: USD600m - January 2019
Natixis: EUR4.774m/USD5.3m - September 2019
Renew Power: USD300m - September 2019 – Certified Climate Bond
Reykjavik Energy: ISK2bn/USD16.3m - August 2019

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Fannie Mae: USD4.2bn - September 2019 (177 deals)

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. Although we support the Sustainable Development Goals (SDGs) overall and see
many links between green bond finance and specific SDGs, in particular SDGs 6, 7, 9, 11, 13, 14 and 15, the proportion ofproceeds allocated to social goals should be no more than 5% for inclusion in our database.
Issuer Name

Amount issued

Issue dateReason for exclusion/ pending

Inter-American Development Bank

EUR275m/USD303.8m

22/10/2019

Excluded (Sustainability/Social bond)Enel

17/10/2019
17/10/2019
17/10/2019
16/10/2019
16/10/2019
15/04/2019

Excluded (Sustainability/Social bond)Shinhan Bank

EUR1bn/USD1.1bn
EUR500m/USD552.4m
EUR1bn/USD1.1bn
USD1bnUSD1bn
USD400m

Crédit Mutuel Arkéa

EUR500m/USD547m

03/10/2019

Excluded (Sustainability/Social bond)OeKB

EUR500m/USD549m

08/10/2019

Excluded (Sustainability/Social bond)

Jiangsu Eastern Shenghong Co

CNY1bn/USD140.6m

10/10/2019

Excluded (Not aligned)

EBRD

EUR500m/USD552.4m

17/10/2019

Pending (Waiting for more info)

City of Oakland Park, Florida

USD3m

16/10/2019

Pending (Waiting for more info)

Shinhan Bank

EUR500m/USD551.2m

16/10/2019

Pending (Waiting for more info)

PepsiCo

USD1bn

09/10/2019

Pending (Waiting for more info)

Ichinen Holdings Co., Ltd.

N/A

30/09/2019

Pending (Waiting for more info)

Stangastaden

SEK750m/USD76.9m

27/09/2019

Pending (Waiting for more info)

BNG Bank NV

Excluded (Sustainability/Social bond)Excluded (Sustainability/Social bond)Green bonds in the market
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AEON REIT Green Trust - close 21 October
Sparbanken Skane - closed 21 October
China Construction Bank Corporation (Luxembourg) - closed 22 October
City and County of San Francisco - closing 23 October
Renewable Japan - closing 31 October
Ricoh Leasing Company - closing 31 October
New York State Housing Finance Authority: USD87.3m - closing 6 November – Certified Climate Bond

Investing news
Germany-based index provider Solactive has launched an ESG screened green bond index and partnered with Lyxor
Asset Management for the launch of a new ETF: Lyxor Green Bonds ESG Screened UCITS ETF (XCO2), which started
trading on Deutsche Börse Xetra on 1 October 2019.
The London Stock Exchange launched a sustainable bond market (SBM) segment, adding to the green bond segment,
as well as a Green Mark label to help identify green equities and a new Issuer-Level Segment which enables eligible
green economy businesses with more than 90% green revenues to admit bonds to SBM. It also now has mandatory
post issuance reporting requirements for the SBM segments in order to provide investors with more transparency.

Bank of England’s governor Mark Carney predicts that companies and industries that do not move towards zerocarbon emissions and do not adapt will go bankrupt. As the transition towards net zero carbon emissions changes
the value of assets, the risk of potential shocks to the financial system increases.
EIB showed the ambition earlier this year to stop fossil fuel lending. However, the decision has been delayed until
November due to political resistance.

Green bond gossip
Banco Pichincha, Ecuador, is planning to issue a USD150m bond in order to help consumers make eco-minded purchases
and at the same time give businesses an incentive to pursue eco-friendly projects.
Chinese oil refiner Jiangsu Eastern Shenghong has issued a green bond raising CNY1bn (USD140.6m) to finance a
petrochemical complex. In China oil and gas producers are allowed to issue green bonds to finance clean technology andefficiency upgrades. This has provoked controversial reactions by different stakeholder groups.

Readings & reports
The European Commission published its final report on EU climate benchmarks and benchmarks’ ESG disclosures. It
concludes that there are two essential measures to be taken: creating climate benchmarks and the definition of ESG
disclosure requirements. A summary of the document is also available.
The IMF published a report ‘Global Financial Stability Report: Lower for Longer’ which identifies the current key
vulnerabilities in the global financial system. It suggests that policymakers should mitigate the risks and recognises theimportance of integrating ESG principles into the financial system as ESG affects corporate performance and can lead tohigher financial stability. In a recent blogpost entitled Fiscal Policies to Curb Climate Change, the IMF calls for changes inthe tax system and fiscal policies in order to encourage less use of fossil fuels in order to reduce emissions.
Rocky Mountain Institute published two reports which find that 2019 represents a tipping point in the relative costs ofclean energy portfolios and gas-fired power plants, that 90% of proposed combined-cycle gas plants in the US, if built, will
face stranded asset risk by 2035, and prioritizing clean energy investment instead would unlock USD29bn in net customer
savings and avoid 100m tons of CO2 emissions each year—equivalent to 5% of current US electricity-sector emissions.
The Energy & Climate Intelligence Unit created an easily accessible infographic on the IPCC’s Special Report on the Ocean
and Cryosphere in a Changing Climate. It summarises relevant aspects on climate change, implications and action points.

‘Till next time,
Climate Bonds

Disclosure: Some of the organisations mentioned in this communication are Climate Bonds Partners. A list of Partners isavailable here.
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 or investment product andno information within this communication should be taken as such, nor should any information in this communication 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 thecredit worthiness of the designated debt instrument, nor its compliance with national or international laws.
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 in whole or in part on any information contained within
this, or any other Climate Bonds Initiative public communication.