YEAR 2014 GREEN BONDS FINAL REPORT

Final 2014 green bond total is $36.6bn
x3 last year’s total: Biggest year ever for green bonds; growth driven by corporate and municipal bonds

Following a landmark green bond growth year in
2013, the labelled green bond market has once
again experienced a year of incredible growth in2014: by year-end there had been $36.6bn of green
bonds issued by 73 different issuers – that’s morethan a tripling of the market! The final figure wasboosted by a late flurry of green municipal bonds.

Green bond issuance has exploded

New entrants to the market were mainly national
development banks that had been waiting in thewings for the right moment to issue a green bond.
These include banks such as Germany’s KfW,
France’s AFD and Netherland’s NWB Bank.
In addition to new issuers, we saw a diversificationin product types with the World Bank issuing aseries of retail investor focused green bonds, aswell green bonds across 6 different currencies. EIB
continued to be a prolific issuer of green bonds(although they call them Climate Awarenessbonds) and ended the year on top of the issuer
table, across all issuer types, with $5.6bn green
bonds issued in 2014.

Top 10 green bond issuers (USD)
EIB$5.6bnKfW$3.5bnGDF Suez$3.4bnWorld Bank

$3.1bnThis exponential growth takes the total amount ofgreen bonds outstanding to $53.2bn by the end of2014.

Toyota$1.75bn

AfD$1.3bnSo, what happened to cause this tripling ofissuance? Well, corporate and municipal bondissuers joined the green party - big time - whiledevelopment banks continued to be the backboneof green bond issuance. Let’s go through them eachin a bit more detail.

Iberdrola$1bn

Unibail-Rodamco$1bn

Ile de France$829m

Hera SPA$680m

True to form the big development banks stillaccount for the majority of issuance with 44%($16bn) of total green bond issuance in 2014. Thisis split amongst new green bond issuers and theveterans (EIB, EBRD, World Bank and IFC).

2014 Greenbonds by issuertype
Development banks
continue to dominate
green bond issuance,
led by the EIBFirst green asset-backed securities brought tomarket by Toyota
A new type of green bonds also came to themarket; Toyota kicked the year off with a bangwith a $1.75bn green asset-backed bond in Q1.
This bond showcased how proceeds from a bondbacked by car leases and loans can be earmarked
for future green vehicles.
Green corporate bond issuance was the biggest
catalyst for the market explosion
Green corporate “earmarked” bonds helped
create depth in the green market. Not only
did the corporates bring scale, accounting for$12bn issuance, but they also offered a range ofcurrencies -both great for liquidity in the market.
The largest corporate deal of the year was GDF
Suez’s $3.4bn green bond (split into a EUR 1.2bn
and EUR 1.3bn tranches) with proceeds goingtowards renewable energy and energy efficiency
projects.

YEAR 2014 GREEN BONDS FINAL REPORT - FINAL TOTAL IS $36.6bn
As the corporate green bond market matured, wealso saw a move down the ratings with NRG Yield(rated Bb1 by Moodys) and Abengoa Greenfield SA(rated B by S&P) bringing high yield green bonds tothe market in Q3.
Banks leveraged their green loan portfolios toramp up green bond issuance to US$1.2bn
For example, Credit Agricole CIB used their green
loan book to back $478m green retail bonds forJapanese investors over the year. This is great,

Top 5 corporate issuers (USD)

Top 5 unlabelled project & ABS bonds
with proceeds for green
Wind Energy Transm$490m

XINGY 2014-2 A

CNY 2.76bn ($450m

Afvalverwerking

EUR 300m ($374m)

Northland PowerCA$ 232m ($206m)

CGN Wind Energy Ltd

CNY 1bn ($160m)

We also had other types of municipal issuers: In
the first two quarters of 2014, Ile de France brought
EUR 850m ($1.3bn) of green bonds to market. But
it was first in the second half of 2014 when thegreen municipal market really started to heat up
with Ontario and 11 different US States bringing awide range of green bonds to market.

Top 5 municipal issuance (USD)

as banks play a crucial role in the capital pipelineby providing loans and project financing to green
issuers and projects.
After a successful inaugural bond, NRW, theGerman regional bank, chose to get a second
opinion on its next offering, which proved its green
credentials. NAB (National Australia Bank) took it
a step further with its inaugural green bond having
certification against the Climate Bond Standard.
US municipal green bonds drove the muni market
share of green bond issuance to 12%
Green city bonds became popular mid-year withissuances from the Swedish City of Gothenburg
and South Africa’s City of Johannesburg.
Gothenburg was a trailblazing green city issuer
with repeated green issues through the year, while

Top 5 development bank issuers (USD)

Ending the year on a highNot to be missed: A bunch of unlabelled projectand ABS bonds funding green assets
Now, Bloomberg New Energy Finance’s 2014 green
bond total is $38.4bn, but it includes unlabelled
ABS or project bonds. If we include CBI’s list ofproject bonds, which total $2.5bn in 2014, to ourgreen labelled figure we make it $39bn! Amazingly
close to our $40bn prediction for 2014.
This difference in the end total is likely to bearound how we carve up the numbers. CBI uses theBloomberg announcement date for inclusion in the2014 figures.
So, that’s 2014 done...on to 2015! This year we areexpecting the same level of market growth in orderto get $100bn green bond issuance by December
31st 2015. Let’s get started then!
• $36.6bn is the labelled green bond total – thismeans that the issuer has self-labelled the bond as
green in a public statement or bond document.

Jo’burg was the first to show how green bonds canwork for emerging market issuers.