Markets Monthly #8 - 16/09/2020: Cumulative issuance reaches USD900bn mark:Transition White Paper: China record 2020 issuance with USD3.1bn: Meridian Energy
Certifies 3 deals: #CBIConf2020 sessions available online.
Welcome to the Markets Monthly #8!

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Latest Reports

Green bonds market summary - H1 2020
The Green Bonds Market Summary – H1 2020 focuses on the latest market developments inlabelled green bonds and loans.
The summary highlights issuance trends and data points for a period significantly impacted by the
global COVID-19 pandemic.

Credit Suisse and Climate Bonds ‘Financing Credible Transitions – White Paper’
How to ensure the transition label has impact
This Whitepaper presents a framework for identifying credible transitions aligned with the Paris
Agreement. The paper has two purposes:
1. Define the concept of transition by presenting a starting point for the market to see credible green
transitions as ambitious, inclusive, and aligned with the Paris Agreement (and avoiding greenwashing).
2. Put forward a framework for use of the transition label in practice and propose clearly demarcated,complementary roles for both green as well as transition labels. Full paper and Summary Note.

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August at a glance
Overall, August 2020 issuance added up to USD13.2bn, breaking the USD900bn mark and bringing total cumulative green
bond volume since market inception once again closer to the one-trillion milestone.
Last week saw the Climate Bonds Annual conference take place – for the first time fully online – along with marking our
10-year anniversary. The agenda centred on the theme of ’Green Transition’ with sessions spanning three days, 3200
audience members, and 49 speakers. The event reflected movement and motivation in the market that comes withformidable efforts from stakeholder groups, including regulators, investors, issuers, and civil society.
The conference acted as the backdrop for AIIB and Amundi to launch their new Climate Change Investment Framework,(CCIF) which enables the assessment of an issuer’s alignment with climate change mitigation, adaptation and low-carbon
transition objectives. The Framework is endorsed by Climate Bonds.
The transition commitments were tangible as AIIB President Jin Liqun also used the platform to eschew future thermal
coal and related financing; a landmark announcement making waves across the industry.
Other Developments
Elsewhere, the CFA Institute published a consultation paper in August on ESG disclosure standards for investment
products aiming to provide transparency and comparability of the ESG-related features of investment products. The UN is
calling for action to harness digitalisation in creating a citizen-centric financial system aligned to the SDGs.
In the meantime, corporates keep ploughing ahead with more low-carbon commitments: Suncorp (Australia) targets
phasing out existing thermal coal exposures by 2025, as well as ceasing oil and gas-related underwriting by 2025 anddirect investment in them by 2040. In addition, UniCredit is eyeing zero coal exposure by 2028, whereas BP committed to
cutting oil and gas production by 40% by 2030 and considerably upping spending on renewables to hit emissions targets.
Also, third-party reviews are broadening their spectrum as ISS ESG launched its transition bond second party opinion
service, following Sustainalytics’ lead from June. On another indicator around best practice, green bonds and loans
Certified against the Climate Bonds Standard reached USD5.1bn for the month of August, making up an impressive 39% of
overall monthly issuance. Out of the 15 Certified deals, 11 followed the Low-Carbon Transport Criteria.
Meridian Energy (New Zealand) used a different approach to many organisations issuing Certified Climate Bonds: thecompany opted to retrospectively Certify their deals from 2016, 2017 and 2018 that financed wind projects. Meridian also
issued a green bond financing hydro projects, which carries an SPO.

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In August 2020, Development bank issuance peaked, driven once again by Germany’s KfW with a large deal (USD2bn)
after last month’s record figure, as well as multiple issuances from China Development Bank. For the first time in 2020
there was no Sovereign issuance – although early September has already provided contrast with two green sovereign
debuts (see Sovereign Issuers Club section below). Local governments also hit their 2020 record, with all volume comingfrom seven US Munis of which four were from new issuers.
China issuance hit its 2020 record with USD3.1bn
mainly coming from China Development Bank withan equivalent of USD2.6bn. The deals were issued in
USD (China Construction Bank – Hong Kong) and CNY(China Development Bank), all Climate Bonds Certified
and financing low carbon transport projects. There
were also two new issuers: Datang Henan Power
Generation Co., Ltd and Great Wall Guosing Financial
Leasing Co Ltd, both financing Renewable energy.
The rebound comes after a May/June low and theApril record, as China started to recover from themarket shocks earlier this year.
Developed Market (DM) issuance in August 2020 was dominated by the USA, Germany, and Hong Kong with anequivalent of USD4bn, USD2.4bn and USD1.3bn of green volume, respectively. The USA and Germany saw 17 deals each,with the former mainly coming from US Munis, including one large Certified deal (USD1.4bn) by Los Angeles County MTA.
The latter included another deal by KfW (USD2bn). Further, Hong Kong’s MTR Corp issued a USD1.2bn green bond.

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Emerging Markets (EM) made up 26% of total issuance. Part of this comes from Colombia with Interconexion Electrica
having tapped the market twice on the same day to finance projects around Renewable energy generation andtransmission. Panama also saw its second-ever green bond from first-time issuer Panasolar Group, whose deal was
Certified against the Solar Criteria of the Climate Bonds Standard (see New issuer spotlight).
Thailand saw more green bond issuance from repeat issuer Global Power Synergy (PTT PCL), which brought a total ofthree deals to market in August 2020. Reykjavik Energy (Iceland) once again returned to the market amongst others
financing a project whereby CO2 is captured and stored as rock in the subsurface as well as support for smart grid
applications.

> Check out the full list of new and repeat issuers.
> Click on the issuer name to access the new issue deal sheet in our online Bond Library.

Worth reading…
‘How Green Finance could Arrive in the Winner’s Circle after the Pandemic’ – International Banker
…and:
•
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‘The Role of Natural Gas in the Energy Transition’ – Sustainalytics‘Transition Finance Completes the Picture of Greener Goals’ – The Asset‘Pandemic Shows why Climate Change is Major Economic Risk, says Europe’s Schnabel’ – Insurance Journal
Total Cumulative green bond issuance as at 30th June by region/nation. Europe, Asia-Pac and LATAM.

…and worth watching:
Don’t miss this highlight of our Conference! Lord Adair Turner, Chair of the Energy
Transitions Commission in full flight on the very latest developments in clean technology
and transition to net zero. A fascinating full hour, available here.

New issuer spotlight - Certified Climate Bonds
Panasolar Group (USD15m), Panama, came out with a seven-year instrument Certified against the Solar Criteria of the
Climate Bonds Standard 3.0. The proceeds will be used to finance a solar power plant located in Aguadulce district,province of Coclé, Republic of Panamá. The facility currently boasts 9.9MW installed capacity, and the bond will support its
expansion. The facility is registered under the Gold Standard, which allows energy generated at the plant to be used forcarbon credits. This is the first Certification in Panama.

New issuer spotlight
Datang Henan Power Generation Co., Ltd (CNY1bn/USD144m), China, completed its inaugural issuance of a three-year
unsecured green bond. The main share of the proceeds will go towards 14 wind farm projects and a small allocation will bemade towards paying back a portion of debt of two subsidiaries.
There will be a report with information on the use of proceeds and the process of green projects on a semi-annual basis
until maturity.
Climate Bonds view: Climate Bonds welcomes Datang Henan Power Generation’s green bond and its commitment to postissuance reporting, as well as the independent external review at issuance. The prospectus estimated that the wind farms
will save 993,700 tonnes of coal equivalent of electric energy, which is equivalent to avoided emissions of 2,716,900 tonnes
CO2, 646 tonnes SO2, 614 tonnes NOx and 12,922 tonnes dust when compared with coal-fired electricity generation. Wind4

power will continue to turbocharge the world’s largest coal consumer country’s transition into renewable energy and agreener economy.

GPSS Holdings (JPY300m/USD2.8m), Japan, issued its debut green instrument in July. The bond, which was rated Green 1
by JCR, will mature in three years. The proceeds will be used for capital expenditures of 14 solar power generation facilities
currently under construction. The 14 solar plants have a projected annual electricity generation of 48,155MWh, which canbe converted to 24,655t-CO2.
Reporting is planned to be disclosed to investors in terms of both the proceeds allocation that will last a year and theenvironmental benefits (i.e. CO2 emissions, power generation, and reduced household-equivalent figures).
Climate Bonds view: Climate Bonds welcomes the inaugurate corporate green bond from GPSS and applauds the addedtransparency arising from the independent external review by Japan Credit Rating Agency, who assigned it the highest greenscore.
Climate Bonds encourages the renewable energy sector to follow the example of GPSS to work towards grid parity (i.e.
equalizing the levelized cost of electricity production from renewable energy vis-à-vis current power grids) throughtechnological innovation. Green bonds offer funding solutions to developing clean energy infrastructure over the long term.
They will continue to play a pivotal role in financing a resilient and low-cost renewable energy mix for a sustainable society.

The City of Seattle (USD198m), USA, issued its first green bond with a 30-year original tenor. Kestrel Verifiers provided an
SPO and the proceeds will go towards capital improvements to and conservation programs for the municipal light and power
plant and system. This includes improvements to Seattle’s electric utility system, ranging from hydroelectric power
generation, transmission, and distribution infrastructure for renewable energy to improving grid reliability and preparing
city infrastructure for the future of sustainability energy.
Climate Bonds view: This is the first green US Muni issuance from the state of Washington. The number of electricity grids
being connected to renewable energy sources and boosting transmission is increasing, and commonly financed with green
bonds. Also seen in the non-financial corporate space, it is great to note US Muni issuers are starting to do the same.

Interconexion Electrica (COP140bn/USD38m), Colombia, entered the market with a green bond benefitting from an SPO
provided by Sitawi. The funds will go towards the construction of energy transmission infrastructure. The two specificprojects are located on the north coast of Colombia, which will allow the connection of renewable energy (wind and solar)
to the National Interconnected System.
Interconexion will publish reports containing financial and environmental information until the bond matures to ensure thatproceeds are allocated to projects described in the document. Environmental benefits, including the amount of nonconventional renewable energy exchanged (MW), will be reported annually in the company’s sustainability report. This
report will also include the identification of impacts on protected areas and community resettlement.
Climate Bonds view: This is the first ever Colombian green bond to finance grid infrastructure, which also underpins theimportance of energy transformation of the country. Not only is producing renewable energy crucial for this development,
but also connecting the sources to the end users is pivotal.

K2A Knaust & Andersson (SEK400m/USD42.3m), Sweden, came out with its maiden green bond with a three-year tenor
and benefitting from an SPO provided by CICERO. It is a senior unsecured instrument that will finance Green buildings(Nordic Swan Ecolabel and Miljöbyggnad Gold / Silver) and energy efficiency (LED, heating/cooling).
K2A commits to report allocation and impact annually on its website for as long as there are funds outstanding.
Climate Bonds view: Climate Bonds hails the maiden green bond from K2A, which in June 2020 heralded in a new era ofgreen-labelled equity by launching the first green equity framework. The bond was oversubscribed by more than three times
thanks to great interest from especially Nordic institutional investors.

5New issuers continued...
Public Sector
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Brighton Township Municipal Authority (USD5.9m), USA, 20.9Y original term, assured by BAM GreenStar.
City of Laurel, Mississippi (USD5m), USA, 19.9Y original term, assured by BAM GreenStar.
Great Wall Guosing Financial Leasing Co Ltd (CNY1bn/USD144m), China, 3Y original term, SPO provided by CCXI.
North Texas Municipal Water District (USD35.1m), USA, 30Y original term, SPO provided by Kestrel Verifiers.
Spanish Fork City (USD73m), USA, 20.1Y original term, assured by BAM GreenStar.
The Wilkinsburg-Penn Joint Water Authority (USD26.2m), USA, 19.1Y original term, assured by BAM GreenStar.

Financial Corporates•••

Ascendas Real Estate Investment Trust (SGD100m/USD103m), Singapore, 10Y original term, assured by EY.
Piedmont Operating Partnership (USD300m), USA, 10Y original term, no third-party review.
Reconcept GmbH (EUR10m/USD11m), Germany, 5Y original term, no third-party review.

Non-Financial Corporates••

Leader Energy (MYR260m/USD60.9m), Malaysia, 18Y original term, no third-party review – issued in July 2020.
Tucson Electric Power (USD300m), USA, 10Y original term, no third-party review.

Loans
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Ichigo ECO Energy (JPY2.2bn/USD20.2m), Japan, 1.5Y original term, no third-party review.
M&C Tottori Hydroelectric Power Co., Ltd. (JPY15.7bn/USD144.3m), Japan, 23.2Y original term, rated GA1 andSPO provided by R&I (Japan) – issued in July 2020.
M&G Real Estate Asia (KRW11.5bn/USD98.5m), Korea, no third-party review.
Murra Warra II, Australia, no third-party review.

Visit our Bond Library for more details on August deals and a full history of debut green issuances going back to 2017.

Green bond outlook – selected deals
Issuer NameCountry

Closing Date

SourceRenova Inc
CAF
Mediobanca Banca di Credito Finanziario
SpA
Toda Corp
CRE Logistics REIT Inc
Federal Republic of Germany
Sweden Government International Bond
Daimler AG
China Merchants Bank Co Ltd/Hong Kong
Bayerische Landesbank
Zhenro Properties Group
Daiwa Office Investment Corp
Sumitomo Mitsui Auto Service Co Ltd
Mercury NZ Ltd
Big River Steel LLC / BRS Finance Corp

Japan
SNAT
Italy

03/09/2020
04/09/2020
08/09/2020

RenovaJapan
Japan
Germany
SwedenGermany
China
Germany
China
Japan
Japan
Netherlands
USA

08/09/2020
08/09/2020
09/09/2020
09/09/2020
10/09/2020
10/09/2020
10/09/2020
11/09/2020
11/09/2020
11/09/2020
14/09/2020
18/09/2020

R&I
JCR
Deutsche Finanzagentur
International Investment
Automotive World
The asset
Bayern LB
Global Capital
JCR
R&I
Share Chat
PR Newswire

Atalayar
IFR

September has already seen multiple deals coming in. Amongst many repeat issuers, newcomer Daimler AG (Germany) ison the list with an order book 4.2x oversubscribed. Direct competitor Volkswagen (Germany) is poised to follow soon after6

launching its green bond framework in March. Asahi Group Holdings (Japan) will also be tapping the green bond market in
October financing mainly procurement of recycled PET and biomass plastics, purchase of renewable energy, and forest
conservation activities at the company forest.
The green bond country list is also steadily growing and Kazakhstan might be the newest addition: Entrepreneurship
Development Fund “Damu” which is a subsidiary of Baiterek is planning to issue a KZT200m (USD0.5m) financing smallscale RES investment projects undertaken by small and medium businesses.

Sovereign Green Bond ClubThe long-awaited new addition to the Sovereign Green Bond Club, Germany has launched an innovative “twin bond”,
where the green coupon, interest payment dates and maturity are identical to a conventional “twin”. They differ inamount outstanding and time of issuance. The bond also allows a swap from the green issuance to the conventional bondfor liquidity purposes.
Sweden’s green debut of SEK20bn (USD2.3bn) has finally settled at the beginning of September. The ten-year instrument
raised funds which will be linked to budget expenditures that contribute to achieving Sweden’s environmental andclimate objectives.
There are more potential newcomers to the club that are currently considering green bonds: Brazil may finance Amazonrelated projects with the sale of green bonds and Ghana has announced its first green loan to support rural and peri-urban
water projects. The first European sovereign to do so, Luxembourg has established a sustainable bond framework andHungary is planning a green Samurai bond (a JPY-denominated bond issued outside of Japan.)

Data and references
Repeat issuers in August

Repeat issuers: January to July 2020 (not previously included)•

Citigroup: EUR10m/USD11.1m - May 2020

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City of Ottawa: CAD300m/USD230.4m - May 2020
EUROFIMA: EUR800m/USD889.2m - issued from January to July 2020 (6 deals)
Fannie Mae: USD174.3m - July 2020 (9 deals)
LBBW Landesbank Baden-Wuerttemberg: EUR120m/USD133.4m - issued from March to June 2020 (5 deals)
PACE Funding 2020-I (PACE Funding Group): USD107.035m - June 2020

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.

Excluded
Issuer Name

Amount issued

Issue dateReasonTeekay Shuttle

USD75m

28/08/2020

Not aligned

GS Caltex

KRW80bn/USD68.5m
KRW50bn/USD42.8m
KRW130bn/USD111m
KRW140bn/USD120m
USD183.9m

13/02/2020
13/02/2020
13/02/2020
13/02/2020
10/03/2020

GB not aligned
GB not aligned
GB not aligned
GB not aligned
Insufficient information

EUR500m/USD555.8m

10/06/2020

GB not aligned

Consolidated Edison Company of New
York
Prudential Financial

USD600m
USD1bn
USD500m

31/03/2020
31/03/2020
10/03/2020

GB not aligned
GB not aligned
GB not aligned

Changxing Communications
Investment
Shaanxi Coal and Chemical Industry
Group Co Ltd
Yunnan Water Investment Co Ltd

CNY650m/USD93.6m

25/08/2020

General opex

CNY3bn/USD432m

26/08/2020

Not aligned

CNY500m/USD72m

14/08/2020

General opex

Changde Dingcheng Jiangnan New
City Construction Investment Co Ltd
Guangzhou Water Investment Group
Co.Ltd

CNY600m/USD86.4m

14/08/2020

General opex

CNY500m/USD72m

14/08/2020

General opex

Arizona Industrial Development
Authority
Deutsche Bank

Pending
Issuer Name

Amount issued

Issue dateReasonCoca Cola FEMSA

USD705m

01/09/2020

Insufficient information

Vasakronan

SEK100m/USD10.6m

02/09/2020

Insufficient information

Sichuan Province Airport Group Co
Ltd
China Resources Financial Leasing Co
Ltd
China Longyuan Power Group
Corporation Limited
Linköping Stadshus AB

CNY1bn/USD144m

28/08/2020

Insufficient information

CNY1.8bn/USD256.5m

27/08/2020

Insufficient information

CNY1bn/USD144m
CNY1bn/USD144m
SEK500m/USD57m

28/08/2020
28/08/2020
26/08/2020

Insufficient information
Insufficient information
Insufficient information

Huaneng Tiancheng Financial Leasing
Co Ltd

CNY1bn/USD144m

20/08/2020

Insufficient information

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National Finance Authority

USD39.4m

20/08/2020

Insufficient information

Hannon Armstrong

USD375m

21/08/2020

Insufficient information

Thailand

THB30bn/USD988.3m

19/08/2020

Insufficient information

Asian Development Bank

HKD200m/USD25.7m

19/08/2020

Insufficient information

Visa

USD500m

17/08/2020

Insufficient information

Damu FundKZT200m/USD0.5m

11/08/2020

Insufficient information

AKBANK TASUSD50m05/08/2020

Insufficient information

Yuzhou Group Holdings Caompany
Limited
Adecoagro

USD300m

12/08/2020

Insufficient information

USD17.8m

24/07/2020

Insufficient information

CPI Hungary Investments

HUF30bn/USD102.9m

07/08/2020

Insufficient information

Credit Agricole

TRY29m/USD4.9m

06/08/2020

Insufficient information

United States International
Development Finance Corp
Micro, Small & Medium Enterprises
Bonds (Symbiotics)

USD7m

05/08/2020

Insufficient information

USD3.5m

04/08/2020

Insufficient information

As always, your feedback is welcome!
Watch this space for more market developments. Follow our Twitter or LinkedIn for updates. E-mail data requests todataenquiries@climatebonds.net.

‘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.

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