Market Blog #32 - 27/9/19: 2019 GB volume now USD173.2bn eclipsing 2018 total: China
September issuance at USD4.8bn: BIS goes big with GB fund: Climate Resilience Principles:
new sustainable transition partnership between CBI & Credit Suisse: GB gossip and more!

Highlights:●

2019 volume reaches USD173bn, surpassing 2018 total issuance on 17 September●

China: September issuance surpasses USD4.8bn, boosted by ICBC●BIS launches green bond fund for central banks●

Climate Bonds launched the Climate Resilience Principles●

Climate Bonds & Credit Suisse to build roadmap for leveraging bonds to accelerate sustainable transition

Don’t miss!
CBI’s Climate Resilience Principles (CRP) are a new framework, intended for a wide audience,
including but not limited to bond issuers, investors and other stakeholders, seeking guidance on thepotential range and type of climate resilience investments; how to define and assess physicalclimate risks; and how to credibly demonstrate climate resilience outcomes.

CBI published the Latin America & Caribbean: Green finance state of the market 2019. It is the firstdetailed analysis of the LAC green finance market since the first issuer from the region entered themarket in 2014. The report covers green bond issuance, other labelled deals, climate aligned
issuers, a scoping study on existing public sector issuers, as well as spotlight sections on agrifinance and blue bonds. There are also profiles for Brazil, Chile, Mexico, Peru, Argentina, Colombia
and Central America & the Caribbean.

Green bond deals across the globe: 1 Jan – 20 Sep 2019649 Bn173.2 Bn

USD Bn0100> The full list of deals here.

200

300

400

691 Bn
500

600

700

2019 Issued

Total Outsanding
Total Issued

At a glance
Green bond issuance as of 20 September reached USD15.7bn for the month, already surpassing September 2018 issuance.
This takes the 2019 total to date to USD173.2bn, surpassing total 2018 annual issuance on 17 September.
Previous milestones for 2019 include reaching USD100bn in June and USD150bn in August. Forecasts for 2019 are up to
USD250bn. The global climate finance goal is annual USD1tn issuance early in 2020s.

2019: Monthly volume by issuer type
30
Loan

25

Sovereign

20

Government-backed entity

USD Billion

15

Local government

10

Development bank5

Non-financial corporate

0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Financial corporate

Financial corporate issuance has picked up, going from USD300m in August to USD5.7bn or 36% of current September
volume, mainly driven by ICBC’s three green bonds (USD3.2bn). Non-financial corporates follow at 26%, with the largest
September deal (so far) coming from Energias de Portugal SA: a EUR600 (USD663m) bond for renewable energy projects.
After a quiet August for Sovereigns, France came back to market this month, tapping it for EUR1.7bn (USD1.8bn).

Allocation of proceeds: 1-20 September
1% 1%Energy4% 5%

Buildings
30%

9%

USD15.7bn
17%Transport

Water
Waste
Land Use

33%

Industry
ICT
Unalloc. A&R

The highest volume of green bond allocations relate to Buildings (33%) with Covivio (France), Vasakronan (Sweden),Mitsui Fudosan (Japan) and De Volksbank (Netherlands) raising approximately USD500m each and dedicating 100% of theproceeds to properties. Energy currently accounts for the second largest volume with 30%. Allocations to low-carbon
transport (USD2.7bn) are already more than double compared to September 2018 volume (USD1bn).
Two-thirds of September issuance has come from developed markets and about 30% from emerging markets – roughly
the same split as overall issuance in September 2018. EM issuers came from the Philippines (USD300m) and China(USD4.8bn, Sep 2018: USD2.2bn). In DM markets, Sweden has recorded a quadrupling of issuance year-on-year (Sep 2019v Sep 2018), and Germany a tripling.
Repeat issuers accounted for 84% of issuance up until now. We saw 9 debut issuers.
Note: In September, we included Fannie Mae Green MBS issuance of USD3.2bn in August figures.

> 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
Akiem Group SAS (EUR360m/USD398m), France, issued two green bonds (10Y and 15Y original term), which are Certified
against the Low-Carbon Transport Criteria of the Climate Bonds Standard. It will finance or refinance its fleet of electricpowered rolling stock.
Annual reports will be made available to the bondholders only. These reports will have information on the allocation ofproceeds, as well as quantitative impact indicators such as the estimated GHG emissions avoided. The issuer will report onan aggregated basis on the allocation and impact of the green financial instruments.
Akiem, a joint venture between subsidiaries of SNCF (itself a multiple issuer under Programmatic Certication) and a private
wealth fund, owns a fleet of 440 locomotives, which may be attached to either passenger or freight trains.

De Volksbank (EUR500m/USD554m), Netherlands, came to the market with a 5-year bond. It is Certified against the LowCarbon Buildings Criteria under the Climate Bonds Standard. The proceeds will be used to refinance residential mortgage
loans to properties with an Energy Performance Certificate (EPC) Label A in the Netherlands.
There will be an annual report made available publicly on the issuer’s website. It will contain information on the allocationof proceeds and will be independently audited by EY. The annual reports will also include data on the energy consumption
and estimated avoided emissions at the portfolio level.
De Volksbank, a mainly retail bank, has made a commitment to achieve a carbon neutral balance sheet by 2030.

Energy Absolute (THB3bn/USD97.4m), Thailand, debuted in July with a 10-year green bond, recently Certified against theWind Criteria under the Climate Bonds Standard. The funds will be used to refinance the development of the Hanuman
Wind Power Project in Chaiyaphum Province, which became operational in May 2019. It is one of the largest wind farms insoutheast Asia and comprised of 103 wind turbines.
The issuer will report on their website on an annual basis, with a summary of projects and the amounts of allocated andunallocated proceeds. Where possible, the issuer will also provide information such as the amounts of energy generation.
About two-thirds of EA’s revenues are derived from solar and wind power generation, and year-end, it will have 664MW of
installed capacity. In 2019, it launched an electrical car and began investing in EV charging infrastructure.

Elliot Green Power (AUD260m/USD183m), Australia, entered the green bond market with a Certified Climate Bond under
the Solar Criteria of the Climate Bonds Standard. The proceeds will finance the development of three solar farms across
Queensland and New South Wales in Australia.
Annual reports will be made available to the lenders, as well as to the Climate Bonds Initiative. These reports will havedetails on the allocation of proceeds, as well as the locations and installed capacities of the solar farms. The reports will
also include estimates of the avoided GHG emissions.
EGP is an Independent Power Producer (IPP) of solar PV projects in Australia. It is owned by Elliot Management
Corporation (EMC), a global hedge fund, which also has investments in solar energy in the UK and Spain.

New issuers
Public Sector
Dormitory Authority of the State of New York (USD121.4m), USA, issued its debut green bond, maturing in 2036. It will go
towards the construction of Cornell University’s north campus, including buildings and infrastructure for housing. The
project is expected to contribute to the university’s climate action plan and the buildings are expected to achieve LEED
Silver or Gold certifications.

Cornell University plans to publish information on their website when buildings have achieved LEED certification.
Furthermore, there will be voluntary annual updates on the use of proceeds until they have been fully spent.
Climate Bonds view: As our Post-issuance reporting study notes, most municipal bonds provide little or no information on
the allocation of proceeds and funded projects. It is welcome to see the ambition of this issuer and funding recipient todisclose information voluntarily until the proceeds are fully spent. Many US universities have raised green bonds to fundbuilding improvements, but few provide post-issuance reporting. It would be a positive for market transparency for moresuch issuers report on actual allocations and impacts.

Financial corporates
September saw debut issuance from three financial corporates, which will allocate proceeds to Buildings:•••

Nomura Real Estate Master Fund (JPY3bn/USD28m), Japan, 10Y original term, rated Green 1 by JCRA.
Sparebank 1 SMN (EUR500m/USD552m), Norway, 7Y original term, SPO provided by Sustainalytics.
Bank of the Philippine Islands (USD300m) (BPI), Philippines, 5Y original term, SPO provided by Sustainalytics.

In addition to property, Sparebank 1 SMN will also finance circular economy projects, while BPI will also provide financing
for renewable energy, energy efficiency projects, water and waste management. All are planning to provide annual
allocation and, if feasible, impact reports.
Climate Bonds view: Building eligibility criteria are strong, but we would encourage issuers to keep raising the bar and aim
to exceed threshold levels where possible, given the sector’s existing high carbon footprint and impact potential.
BPI’s deal is the largest green bond issued by a bank in the Philippines, while Nomura’s REIT adds to already strong
issuance from J-REITs in 2019. As a general point, we welcome the commitment to annual reporting, particularly the
inclusion of environmental impact indicators, which is now developing as a best practice in for green bonds.
Sparebank 1 SMN has identified a number of certification schemes required for project to qualify for circular economy
financing. These include schemes such as Nordic Swan Ecolabel, Eco-Lighthouse Label, the Marine Stewardship Council(MSC), the Aquaculture Stewardship Council (ASC) and the GLOBAL GAP – The Worldwide Standard for Good Agricultural
Practices. While it is not clear what specific projects will be financed, we have taken the view that the use of certification
schemes to screen projects is a good approach. It is advisable for issuers to provide more information on potential types ofprojects. We will monitor issuer reporting to confirm that the financed projects align to the Climate Bonds Taxonomy.

China Zheshang Bank (CNY5bn/USD704m), China, debuted with a 3-year bond, which benefits from an external assurance
provided by EY. The proceeds will be allocated to 11 projects, including 3 solar farms, a wastewater treatment plant, awaste to energy plant, a land remediation project, 3 metro construction and extension projects and a programme tofinance the purchase of more than 2,000 LNG and electric buses.
Climate Bonds view: The issuer has provided detailed information on the use of proceeds and expected climate andenvironmental impact which follows PBoC’s green bond guidelines and green bond principles. We hope to see more green
bonds with the same level of clarity and transparency.

Non-financial Corporates
Daiken Corporation (JPY5bn/USD46m), Japan, entered the market with a 3-year, unsecured bond rated as Green 1 by
JCRA. They proceeds are to be used to fund the production of insulation boards from construction waste materials, namely
a steel manufacturing by-product and unused volcanic soil.
The proceeds are expected to be fully allocated within one year. The issuer will disclose a summary of the funded eligible
projects, allocated and unallocated amounts until full allocation, as well as several indicators of environmental
improvement once a year, until maturity.
Climate Bonds view: The creation and implementation of circular economy initiatives is catching on globally, but holistic
resource management is still very limited. It is encouraging to observe growth in sustainable industrial projects in Japan, as
to date – on a global basis – only a small portion of green bond proceeds have been allocated to waste management andindustrial processes.

Visit our Bond Library for more details on September deals.

Bonds issued in August 2019•

City of Heber Springs (USD15m), USA, 25Y original term, assurance under BAM GreenStar. This US Muni bond willfund improvements to the local wastewater treatment plant and to the main sewer line amongst others.

•

Corporación Interamericana para el Financiamiento de Infraestructura (USD200m programme), Panama, up to 10Y
term (varies by bond). Projects may include wind, solar, geothermal, hydro under 25MW, waste management,
wastewater treatment, recycling and co-generation in the region. CIFI operates in Latin America and Caribbean.

•

Banco de Chile (USD48m), Chile, 12Y original term. The proceeds will finance or refinance renewable energy projects
across Chile. This is the first green bond from a Chilean financial institution, be it private or public. It is also the first
Chilean green bond to finance solely renewable energy, a very under-represented use-of-proceeds sector in the
country (just 0.1% of total country volume through 2 July 2019).

•

Celulose Irani (BRL505m/USD131m), Brazil, 6Y original term, SPO provided by Sitawi. The proceeds will go towards
refinancing paper production. Almost all of Celulose Irani’s forestry operations are in FSC-certified areas. This includes
production of derivatives such as resin. In addition to that, a significant share of their energy comes from renewablesources. The issuer will report on allocations and a number of environmental impact metrics annually on its website
and/or sustainability report.

•

Grupo Sabará (BRL20m/USD4.9m), Brazil, 5Y original term. This private placement will finance investment in theconstruction of an eco-efficient industrial plant that will produce sodium chlorite* in Santa Barbara d’Oeste and relies
entirely on renewable energy. Sabará will disclose the use of proceeds and impacts via annual updates on its website
and every three years in its Sustainability Reports, until maturity.
* Sodium clorite is a chemical compound used in the manufacturing of paper and as a disinfectant. It is used for thetreatment of water to make it potable. It is also a cleaner alternative than traditional oxidants in paper production andreduces the need for energy and water in the production of sugar and alcohol.

•

Hezhou Public Transport (CNY60m/USD8m), China, 6Y original term. The 7-tranche green ABS is backed by bus ticket
receipts, i.e. revenue from public transport. The issuer purchased a fleet of 200 electric buses early this year. We willkeep an eye on the further disclosure of this ABS deal and hope to see links between the investment in electric buses
and the ABS issuance.

Repeat issuers – through 20 September
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

ADB (Asian Development Bank): AUD150m/USD102.7m
ADB (Asian Development Bank): HKD115m/USD14.7m
Bank of Guiyang: CNY3.0bn/USD424.5m
Beijing Infrastructure Investment: CNY4.0bn/USD566m
Brookfield Renewable Partners: CAD600m/USD454.6m
City of Malmo: SEK500m/USD50.85m
Covivo: EUR500m/USD551.8m
Energias de Portugal SA: EUR600m/USD662.6m
Fabege AB: SEK500m/USD51.8m
Hannon Armstrong: USD150m
ICBC: HKD4.0bn/USD511.3m
ICBC: CNY1.0bn/USD141.2m
ICBC: USD2.5bn
IFC (International Finance Corporation): CAD750m/USD568.3m
KfW: USD2.0bn
Kommuninvest: SEK3.0bn/USD311m
Republic of France: EUR1.7bn/USD1.8bn

•
•
•
•
•
•
•

Stockholm Exergi Holding AB: SEK2.0bn/USD206.3m
Vasakronan: EUR600m/USD660.4m
Vasakronan: SEK600m/USD61m
Vasakronan: EUR500m/USD552.125m
Vasakronan: AUD25m/USD17.11275m
Wallenstam AB: SEK500m/USD50.85m
Östersund Municipality: SEK825m/USD85.2225m

Repeat issuers accounted for 84% of issuance up until 20th September

0

1

2

3

4

5

ADB
Brookfield Renewable Partners
Fabege AB
ICBC
Kommuninvest
Stockholm Exergi Holding AB
New issuers

6

7

8

9

10

Bank of Guiyang
City of Malmo
Fonciere des Regions
IFC
Ostersund Municipality
Vasakronan

11

12

13

14

15

16

USD Billion

Beijing Infrastructure Investment
EDP
Hannon Armstrong
KfW
Republic of France
Wallenstam AB

Repeat issuers: Jan – Aug 2019
•
•
•
•
•
•
•
•
•
•

Energy Absolute PCL: THB3bn/USD97m - July 2019
Energy Absolute PCL: THB4bn/USD130m - August 2019
Fannie Mae: USD3183.7m - August 2019
IFC (International Finance Corporation): SEK250m/USD26.7m - July 2019Japan Railway Construction, Transport and Technology Agency: JPY34bn/USD321m - August 2019
Kingdom of Belgium: EUR1.3bn/USD1.4bn (re-opening, 3 bonds) - March 2019
Kingdom of Belgium: EUR1.1bn/USD1.2bn (re-opening, 3 bonds)- July 2019
ReNew Power: USD60m (re-opening) - March 2019
Reykjavik Energy: ISK2040m/USD16.3m - August 2019
SNCF: EUR100m/USD111.9m (re-opening) - August 2019

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

China Three Gorges Corporation

CNY3bn/USD424.5m

11/09/2019

Excluded (Working capital)

China Three Gorges Corporation

CNY500m/USD70.8m

11/09/2019

Excluded (Working capital)

RCBC

USD300m

11/09/2019

Excluded (Sustainability/Social bond)

Enel

USD1.5bn

10/09/2019

Excluded (Sustainability/Social bond)

Guangzhou Yuexiu Holding Ltd

CNY700m/USD99.1m

09/09/2019

Excluded (Working capital)

Otto Group

EUR50m/USD54.9m

03/09/2019

Excluded (Sustainability/Social bond)Guangzhou Metro Group Co.,Ltd.

CNY2bn/USD283.2m

03/09/2019

Excluded (Working capital)

Capital Airports Holding Company

CNY1.5bn/USD212.9m

02/09/2019

Excluded (Not aligned)

Chengde City Of Control
Investment Group Co.,Ltd.

CNY840m/USD118.9m

02/09/2019

Excluded (Working capital)

Porter Special Utility District

USD13.28m

01/09/2019

Excluded (Not aligned)

Huaneng Tiancheng Financial
Leasing Co.,Ltd.

CNY1bn/USD141.6m

30/08/2019

Excluded (Working capital)

Changxing Binhu Construction
and Development Co.,Ltd

CNY410m/USD58.1m

29/08/2019

Excluded (Working capital)

Changxing County Traffic
Construction Investment
Company
Beijing Geoenviron Engineering &Technology, Inc.

CNY1.3bn/USD184.1m

27/08/2019

Excluded (Working capital)

CNY600m/USD85m

23/08/2019

Excluded (Working capital)

Lu'An Mining Industry Group
Co.,Ltd.

CNY2.8bn/USD402.1m

22/08/2019

Excluded (Working capital)

Marfrig

USD500m

06/08/2019

Excluded (Not aligned)

California Community Housing
AgencyUSD110.8m

28/06/2019

Excluded (Not aligned)

Port of Los Angeles

USD15.7m

18/09/2019

Kaneka Corporation

JPY500m/USD46.5m

12/09/2019

ReNew Power

USD300m

12/09/2019

Northern States Power Company

USD600m

10/09/2019

Pending (Waiting for more
information)
Pending (Waiting for more
information)
Pending (Waiting for more
information)
Pending (Waiting for more
information)

Director of the State of Nevada
Department of Business andIndustry Environmental
Improvement Revenue Bonds
First Abu Dhabi Bank

USD50m05/09/2019

Pending (Waiting for more
information)

USD50m03/09/2019

BKS Bank

EUR5m/USD5.5m

01/08/2019

Pending (Waiting for more
information)
Pending (Waiting for more
information)

Green bonds in the market
•
•
•
•
•
•
•
•
•
•

Grupo Pestana – closed 23 September
PostNL – closed 23 September
Bank of the Philippine Islands – closed 24 September
City of Toronto – closed 24 September
Sumitomo Warehouse – closed 24 September
ING Bank Hipoteczny – closed 25 September
Nordic Investment Bank – closed 25 September
The Conservation Fund – closed 26 September
Interstate Power & Light (Alliant Energy) – closed 26 September
Acorn Holding – closing 27 September

•
•
•
•
•
•

Tokyu Land Capital Management – closing 27 September
EBRD – closing 27 September
Mitsubishi Electric Credit Corporation – closing 30 September
NCC – closing 30 September
Renewable Japan – closing 1 October
Generali – closing 1 October

Investing News
The Bank for International Settlements (BIS) has launched an open-ended fund for central bank investments in green
bonds.
Kenya is aiming to make green bond investments more attractive with MPs backing a tax exempt plan for green bonds.
China may include clean coal projects in their catalogue of eligible categories of their green bond programme. The decision
is yet to be made but causes a debate on China’s ambitions to fight climate change.
EBRD issues its first climate resilience bond under the new CBI Climate Resilience Principles.
Enel issued its first bond linked to the achievements of the UN’s Sustainable Development Goals. The issue will fundprojects related to clean energy and smart meter infrastructure amongst others.
BBVA launched an extensive green loan programme for SMEs and freelancers to fund electric or hybrid cars for businesspurposes. This extends BBVA’s efforts to fight climate change after launching eco-car loan for consumer customers.
Asset manager Amundi launched a climate bond fund together with the Asian Infrastructure Investment Bank. For thispurpose a framework has been developed that assesses issuers’ ability to cope with climate change.

Green Bond Gossip
The Stevens Institute (USA) will raise USD270m in green bonds to fund student housing projects comprising of two newstudent residential towers and a university centre in Hoboken, NJ.
Urja Global (India) is considering issuing a green bond of up to USD500m to fund projects on renewable energy andelectric vehicles.
Kerala Industrial Infrastructure Fund Board (India) is planning to be the first entity owned by an Indian State, Kerala, toissue a green bond. The use of proceeds will be used to fund non-conventional energy sources.
BMO (Canada) published its Sustainable Financing Framework under which social bonds, green bonds and sustainability
bonds will be issued. The framework benefits from an SPO provided by Sustainalytics.

Readings & Reports
The EU sustainable finance taxonomy raises questions of being too stringent and therefore discouraging for issuers.
Analysis shows that only 17% of the bonds within the widely-used Bloomberg Barclays MSCI Green Bond Index would
meet the taxonomy’s criteria.
The Principles for Responsible Investment (PRI) have just released a set of six updated briefing papers around theInevitable Policy Response (IPR) scenario planning for investors.
131 banks committed to align their businesses with the goals of the Paris Agreement and the Sustainable Development
Goals (SDG) by signing up to the Principles of Responsible Banking.
Novethic conducted a study on the integration of Sustainable Development Goals (SDGs) amongst European asset owners
that have signed the Principles for Responsible Investment (PRI). Amongst others it found that climate change is the mosttargeted SDG and many asset owners claim that SDGs are strategic for their investments.

According to a report by the Transition Pathway Initiative only two of the largest oil and gas companies have emission
reduction targets that are aligned with the Paris agreement.
Exponential Roadmap published two reports on solutions in order to reduce greenhouse gas emissions by 50% by 2030
and why action has to be taken now.

‘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.