Market Blog #15: USD13.9bn GBs in October: 1st Mexican GB to finance protected agriculture: 1st GB for
green building from airline company
Highlights:
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USD13.9bn green bonds monthly volume
Certified Climate Bonds from Societe du Grand Paris and EnBWFIRA issues first Mexican green bond for protected agriculture projects
Firsts from Japanese green bond issuers from the aviation, forestry & paper and consumer goods sectors
78% of monthly volume from benchmark deals of USD500m or above
Holland unveils plans to issue Sovereign Green Bond – read on in Sovereign Green Bond Gossip below

Don’t miss:••Green Bond Pricing in the Primary Market Report: January – June 2018
China Green Bond Market Q3 2018 – in English and ChineseGreen bond deals across the globe

2018 Issued

447 Bn123.8 Bn

USD Bn
0

100

200

300

477 Bn400

500

Total Outsanding
Total Issued

Go here to see the full list of new and repeat issuers in October.

October at a glance
Green bond issuance totalled USD13.9bn. That is 15% below the corresponding 2017 monthly figures however
Fannie Mae has yet to report and there are a number of deals on our pending list, i.e. deals about which we are
seeking additional information to decide if they would be included in our green labelling database or not.

Energy again led proceed allocations at 35% and volumes allocated to transport were boosted to 30% thanks to threedeals: Societe du Grand Paris will use proceeds to finance the first stage of a long term upgrade to urban over groundlines in Paris, ALD SA (Germany) for electric vehicles and Sichuan Railway Investment (China) for intercity rail.

October volume by use of proceeds
100%

ICT
Industry
Adaptation
Land Use
Waste
Water
Transport
Buildings
Energy

80%
60%
40%
20%
0%
2018

2017

Almost 70% of corporate volumes come from benchmark sized deals of USD500m or more including issuance from
EDP (Portugal), Getlink SE (France), ALD SA (Germany) and EnBW (Germany). Most banks have also issued in this size
range.
The largest deal was Ireland’s sovereign green bond at EUR3bn (USD3.5bn), with government-backed Societe duGrand Paris and development bank KfW also issuing deals of more than USD1bn.
Deals of USD100m or below were the most frequent (almost 40% by number). Japanese issuers Ana Holdings, Marui
Group and Tokyo Century Corp all successfully issued JPY10bn (USD89m) deals in the domestic market. US Munis andother local governments also entered the market with small issues.
Benchmark size deals account for 78% of volumes
100%
80%
60%
40%
20%
0%
Deals
Up to 100m

Issued amount
100-500m

500m-1bn

1bn or more

> 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
EnBW (EUR500m/USD568), a German electricity supplier, issued a 15-year senior unsecured Certified Climate
Bond, certified under the Solar, Wind, Marine Renewable Energy, and Low Carbon Transport Criteria of the Climate
Bonds Standard. 93% of the proceeds will be allocated to wind projects, including two offshore wind farms located in
the North Sea with a combined capacity of 160MW. The rest will go to solar (5%) and EV charging infrastructure (2%).
ISS-Oekom provided the Pre-Issuance Verification Report.

Societe du Grand Paris (EUR1.75bn/USD2.01bn), France, issued a 10-year senior unsecured Certified
Climate Bond under a EUR5bn Green EMTN programme. The issuer obtained a programmatic Certification under the
Low Carbon Transport Criteria of the Climate Bonds Standard, meaning that the Certification covers all futureissuance under the programme.
Proceeds will fund the construction of new metro lines and extensions to existing ones, adding almost 200km of new
automatic metro lines to the 400km of existing lines in the Ile-de-France region. The bond will also finance thedevelopment of 68 stations and 7 technical centres as part of the Grand Paris Express project. All eligible assets are
fully electrified and exclusively support electric assets.
Sustainalytics provided the Pre-Issuance Verification Report.
Climate Bonds view: The adoption by SGP of the streamlined Programmatic Certification process is a welcome step,
particularly given the multi stage decade long nature of this infrastructure project and proposed multiple certified
green issuance. SNCF in France and SF BART and both New York and LA MTA are other large public transport
operators who also certify on a programmatic basis.

New issuers
Ana Holdings (JPY10bn/USD89m), Japan, issued a 10-year senior unsecured green bond, becoming the firstairline company globally to enter the green bond market. The deal received a GA1 Green Bond Assessment from R&I.
Proceeds will finance the construction of a new energy efficient building, which will be used as a training centre andis expected to open in March 2020. The property will feature various energy efficient components including solar
power generation equipment, LED lighting and natural ventilation. The building is designed to achieve a 33% Energy
Reduction Ratio (ERR) under the Tokyo Metropolitan Government’s Green Building Program, corresponding to a
Rank 3 or the highest of three levels. This rank level is equivalent to an A-rank of the CASBEE certification.
Climate Bonds view: The Tokyo Metropolitan Government Green Building Program targets newly constructedbuildings in Tokyo with a total floor area of over 5,000 m2. The system – in line with CASBEE – evaluates four fields:
efficient energy use, appropriate use of resources, preservation of natural environment and mitigation of the heatisland effect. Within each field there are several items, such as the ERR, which are rated using a 3-point rating scale,
3 being the highest.
Comprehensive Assessment System for Built Environment Efficiency (CASBEE) is a method for evaluating and rating
the environmental performance of buildings and the built environment. It is a comprehensive assessment of thequality of a building, evaluating features such as interior comfort and scenic aesthetics, in consideration ofenvironment practices that include using materials and equipment that save energy or achieve smaller
environmental loads. The CASBEE assessment is ranked in five grades: Superior (S), Very Good (A), Good (B+), Slightly
Poor (B-) and Poor (C). We would like to see more buildings ranked A or S being funded by green bonds.

City of Minneapolis, Minnesota (USD96m), USA, issued a 24-tranche green US Muni (longest dated bond:
28 years). This is the second US Muni green bond from a Minnesota issuer in 2018 after repeat issuer City of SaintPaul came to market in early October. The deal received an external review from Kestrel Verifiers (not publicly
available). Proceeds are earmarked for a new Public Service Center, which will provide accommodation for the police
department and other public services departments, and a new East Side Storage and Maintenance Facility used forsolid waste and recycling operations, as well as for vehicle maintenance. The issuer has committed to obtaining a
LEED Gold certification for both buildings.
Climate Bonds view: Another US Muni issuer seeking an external review is a positive in this market. We encourage
issuers to make these documents publicly available to enhance transparency.

Commerzbank (EUR500m/USD573m), Germany, issued a 5-year senior non-preferred green bond, which
benefits from a Sustainalytics Second Party Opinion. Proceeds will be allocated to financing and refinancing loans
related to solar and onshore and offshore wind projects. For a loan to be eligible, the first drawdown must have
happened within three years prior to the green bond’s settlement date.
Climate Bonds view: This is the fifth German issuer to enter the green bond market in 2018 and the second
commercial bank after DZ Bank earlier in October. The country’s cumulative total stands at USD32.1bn to date.

Daio Paper Corporation (JPY20bn/USD178m), Japan, issued a two-tranche senior unsecured green bond(longest dated bond: 10 years), becoming the first Japanese green bond issuer from the Forestry & Paper sector.
DNV GL provided the Second Party Opinion. Proceeds will finance hard-to-recycle recovered paper facilities as well asa biomass boiler and power generating facility. The waste produced during the process of extracting raw materials
from hard-to-recycle paper will be incinerated and the resulting heat will be reutilised for power generation and in
the drying process of papermaking. The biomass boiler and power plant will exclusively use “black liquor” as asource, which is a waste fuel generated from the pulp extraction process.
Climate Bonds view: Daio Paper Corporation was identified as being climate aligned and a potential green issuer inthe Land use sector in our Q3 2018 Market Summary and this move is welcomed. As all biomass sources come fromwaste sources, it is aligned with our updated Taxonomy.

Encevo SA (EUR250m/USD289m), Luxembourg, issued a 15-year green Schuldschein – the first from a
Luxembourg green bond issuer. Proceeds will finance renewable energy projects, grid infrastructure constructionand efficiency improvements, smart metering, green buildings which have obtained at least a DGNB Goldcertification (such as the Bové and Bettembourg projects), as well as hybrid and electric vehicles and related
infrastructure such as EV charging stations.
Climate Bonds view: The deal is the largest green Schuldschein issued in 2018 so far, taking the total volumes for theyear to USD599m, or almost a fourth of the USD2.5bn cumulative volumes.

Fideicomisos Instituidos en Relación con la Agricultura (FIRA) (MXN2.5bn/USD130m), Mexico,
issued a 3-year senior unsecured green bond to finance greenhouses and related irrigation infrastructure thatcomply with the Climate Bonds’ proposed Protected Agriculture in Mexico Criteria. The trust has thus become
Mexico’s first issuer to use a green bond to finance projects exclusively related to agriculture and land use.
Climate Bonds view: The issuer shows a high degree of integrity by setting eligibility requirements that match theProtected Agriculture in Mexico Criteria. This particular sector Criteria is in the process of being finalised andCertification will soon be available for issuers seeking to finance protected agriculture assets.

Marui Group Co Ltd (JPY10bn/USD89m), Japan, issued a 5-year senior unsecured green bond – the firstgreen bond from a Japanese issuer in the retail sector. Sustainalytics provided the Second Party Opinion. Proceeds
will be used to finance solar and wind power generation, as well as to source 100% of its electricity from renewables
and to fund the switch to LED and guidance lights that aim to achieve at least 40% reduction in energy consumption,
air conditioning, hot and cold water dispensers and cooling water pumps, escalators and elevators targeting at least
30% reduction and transformers that aim to achieve at least 50% reduction.
Climate Bonds view: We welcome corporates in the retail business financing solutions to reduce their carbon
footprint from energy consumption. We hope to see more issuers from the sector entering the market.

UGE International (USD0.5m), USA, issued a 5-year privately placed secured green bond as part of a wider
financing structure. Net proceeds from the bond will be used to finance eligible solar projects of UGE through UGE
Project HoldCo Ltd, a wholly-owned subsidiary of the Company. The deal is secured against the issuer’s projects.
Climate Bonds view: Solar assets are easily identifiable as green. Nevertheless, issuers are always encouraged tocreate a green bond framework and seek an external review to provide clarity on their selection of projects,
management of proceeds and reporting methods.

Repeat issuers
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Anglian Water: GBP300m/USD384.7m
Berlin Hyp: EUR500m/USD573m
City of Lund: SEK600m/USD66.1m
Credit Agricole CIB: USD70m
Indiana Finance Authority: 16 tranches for a total of USD153m
KfW: EUR1bn/USD1.14bn
KommunInvest: SEK3bn/USD333m
New York State Housing Finance Agency: 34 tranches for a total of USD136m (Certified Climate Bond)
Societe Generale (Taipei branch): 3 tranches for a total of TWD1.6bn/USD52m
Tokyo Metropolitan Government: 2 tranches for a total of JPY10bn/USD89m
Repeat issuers account for 28% of issuance

0

1
2
3
4
5
6
7
Anglian Water
City of Lund
Credit Agricole CIB
New York State Housing Finance Agency
KommunInvest
City of St Paul
Mitsubishi UFG

8

9
10
11
12
13
14
USD
Billions
KfW
Societe Generale
Tokyo Metropolitan Government
Indiana Finance Authority
Berlin Hyp
Anglian Water
World Bank (IBRD)

October trends
2018 monthly issuance volume
25
20
15

USD Billions

10
5
0
Jan

Feb

Mar

Apr

CBI certified

May

Jun

CBI definedJul
Excluded

Aug

Sep

Oct

15

2018 Monthly volume by issuer type
20
18

Loan

16

Sovereign

14

Government-backed entity

12

Local government

USD Billions

10
8

Development bank6

Non-financial corporate

4

Financial corporate

2

ABS

0
1

2

3

4

5

6

7

8

9

10

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) overalland see many links between green bond finance and specific SDGs, the proportion of proceeds allocated to social
goals needs to be no more than 5% for inclusion in our database.

Issuer Name

Amount issued

Issue date

KasikornBank

USD100m30/10/2018

Reason for exclusion/
pending
Sustainability bond

Gunvor

USD745m

15/10/2018

Sustainability/Social bond

DP World

USD2bn17/10/2018

Sustainability/Social bondShanxi Jinhua Yumei Coal
Chemical Industry
AGRICUL DEV BANK CHINA

CNY620m/USD92m

18/07/2018

Not aligned

CNY3bn/USD450m

02/07/2018

Not aligned

Hangzhou Yuhang Toursism
Group
CHINA THREE GORGES CORP

CNY600m/USD87m

31/10/2018

Working capital

CNY4bn/USD577m

31/10/2018

Working capital

Korean Housing FinanceCorporation
Kookmin Bank

EUR500m/USD568.2m

30/10/2018

Social covered bond

USD300m

23/10/2018

Sustainability bond

UGE International

USD0.7m

23/10/2018

Not aligned

Taixing Jiangsu Rural
Commercial Bank
Ormat Technologies Inc.

CNY300m/USD43.2m

18/10/2018

Not aligned

USD114.7m

31/10/2018

Unlabelled

Masdar

N/A

11/10/2018

PendingThe Republic of Seychelles

USD15m29/10/2018

Pending

Umweltbank

EUR40m/USD46.8m

20/07/2018

Pending

Obayashi

JPY10bn/USD89m

25/10/2018

PendingSmåkraft AS

EUR50m/USD57.3m

22/10/2018

Pending

Agrosuper

USD100m30/10/2018

PendingNaturgy Energy Group SA(formerly Gas Natural Fenosa)

BRL130m/USD35m
BRL265m/USD71m

31/10/2018

Pending

Green bonds closed in early November
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Japan Real Estate Investment Corporation: JPY10bn - closed 1st November
University Properties of Finland: closed 2nd November
Fuyo General Lease Co., Ltd.: JPY10bn – closed 2nd November
Royal Schipol Group NV: EUR500m – closed 5th November (Certified Climate Bond)
Qilu Bank: CNY3bn - closed 5th November

Green bonds in the market
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China Industrial Bank: CNY30bn - closed 1st November
City of Gothenburg: SEK1bn – closed 5th November
Bank of Jiujiang: closing 6th November
California Educational Facilities Authority: USD39.6m – closing 7th November
Bank of Chongqing: closing 7th November
MünchenerHyp: EUR500m – closing 8th November
BNG Bank: USD500m – closing 8th November
Prologis International Funding II SA: EUR300m – closing 14th November4
City of Los Angeles: USD220.5m – closing 15th November5
New Jersey Infrastructure Bank (New Jersey Environmental Infrastructure Trust) – closing 29th November
City of Bloomington – closing 5th December

Investing News
Ormat Technologies Inc., a US-based vertically integrated company engaged in geothermal and recovered energy
generation, closed a USD114.7m first tranche of a project finance agreement with OPIC totalling up to USD124.7m.
The loan will be used to finance the 35MW Plantares geothermal power plant in Honduras. As the deal was notlabelled as green and has not obtained an external review or green bond rating it has been excluded from our green
bond database, but it is a good example of a deal that could be labelled.
German asset manager DWS launched the DWS Invest Green Bonds, a new euro-denominated sustainability-focused
fixed income fund.
FIM Asset Management launched Finland's first Green Bond fund in early October.
The UK government earmarked GBP60m to fund R&D projects tackling air quality and climate change impacts as partof its Strategic Priorities Fund. It has also committed an additional GBP20m to the Clean Growth Fund, which will
invest in companies developing technologies to reduce GHG emissions.

Mexico's president-elect has said he will respect the result of a referendum that rejected a partly built new airport
for Mexico City, effectively ending the USD13 billion project. Details about how the outstanding green bonds will betreated have yet to be released.

Sovereign Green Bond Gossip
The Netherlands is planning to come to market with a sovereign green bond in 2019, more details to come in early
December. In the Treasury’s press release, the Finance Minister is quoted as saying: “Up till now, Dutch pension
funds, insurance companies and banks looking for green investments in safe sovereign bonds had to look abroad. I
have decided to issue a green bond because I think sustainable investments and a further boost to the green capital
market in the Netherlands are important goals.” The decision comes after a feasibility study found that EUR3.5-5bnof government spending could be earmarked as green annually.
Global Capital quotes a letter to Parliament in which Dutch Finance Minister Hoekstra lays out his thinking about thecosts of issuing a green bond, and how he weighs them against the potential benefits: “The condition that a green
bond should perform at least as well as a comparable standard bond in terms of price is also expected to be met.
There are indications — albeit with the necessary uncertainty — that the issuer with a green bond could even achievea modest interest benefit. My Belgian colleague has stated that with the issuance of its green bond, Belgium saves
more than €1m a year in interest costs.”

Green Bond Gossip
Flemmish Community is set to start investor meetings in November for its debut sustainability bond.
Finnish OP Financial Group is planning a green bond issuance after obtaining a Sustainalytics Second Party Opinion
on its Green Bond Framework.
Japan headquartered Daiwa Securities Group developed a Green Bond Framework which obtained a Sustainalytics
Second Party Opinion.
Rhode Island Infrastructure Bank (RIIB) is the latest signatory to the Green Bond Pledge.

Reading and Reports
The Government of Canada released its Interim Report on the Expert Panel on Sustainable Finance.
Carbon Brief developed an interactive tool to show how global warming is projected to affect the world and its
regions.
Climate Strategies published three Insight Briefings on the IPCC Special Report on Global Warming of 1.5°C (SR15).
The full SR15 Report and associated documents are now available in a single 792 page PDF. Happy reading!
Latest IEA reports:• Energy Efficiency 2018 - Analysis and outlooks to 2040
• Outlook for Producer Economies – Critical questions for the world’s largest oil and gas producers• Renewables 2018 – Market analysis and forecast from 2018 to 2023
Sean Kidney writes on the role of Taxonomies in Foresight Climate and Energy.

Climate Bonds Reports
Green Bond Pricing in the Primary Market: January – June 2018
China Green Bond Market Q3 2018 – in English and ChineseMoving Pictures (And Sound)State of the Market Launch in Australia – Story and Pics
Watch how India is building one of the world’s most sustainable cities.
Take 1:12 mins to learn how hydrogen trains work.
Get a snapshot of the US green muni market with these Bloomberg Radio interviews broadcast from the BAM
America offices.
‘Till next time,
Climate Bonds

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