Markets Monthly #2 – 11/03/2020: Cumulative issuance passes USD800bn: Newdomestic issuance from Russia: Hungary to issue a green sovereign? Cadent establishestransition bond framework: VW launches Green Finance Framework, reports and reading
all inside!
Welcome to the Markets Monthly!
We’re testing our new format and would love to hear your feedback…
We are looking to provide a more holistic view of the green bond market, integrating analysis and reading lists, with afocus on selected deals by new issuers.
If you’re interested in offering feedback or would like to know more about our Market Data please reach out at:
dataenquiries@climatebonds.net

Don’t Miss! Livestream Event.
EU Finance Stakeholders Dialogue on EU Taxonomy final reports released on Monday. Our CEO (and TEG representative)
Sean Kidney is amongst the speakers.
Thursday 12th March 10:00-15:00 CET. Two sessions.
Agenda here: Live Stream page here. Climate Bonds’ latest TEG post here. Flashback! "Europe is on a march to change"
Our Sept 2017 1m:26 secs video explainer on the EU process.

February at a glance
In February 2020, overall issuance added up to USD14.9bn, representing a 1% increase from January and a year-on-year
decrease of 15%. This takes cumulative issuance to USD805bn. Of the total February volume, USD3.5bn (23%) were
Certified Climate Bonds, including Goldman Sachs Renewable Power LLC (USA) which is new to the market for financing
renewable energy assets and from Japan, Tohoku Electric Power and rail operator JRRT. A total of USD8.8bn of green

1bonds issued in February are still under review on whether they meet Climate Bonds’ criteria. This may provide an
additional boost to February figures.
A total of USD4.4bn have been excluded from the Climate Bonds Green Bond Database for reasons including funding
working capital or allocating more than 5% of proceeds to social projects. One of these excluded instruments comes from
JetBlue; a sustainability-linked loan in which the interest rate varies with ESG score performance of the company. This
makes JetBlue the first airline to borrow against such conditions.

Adding to the strong start of Sovereign issuance in 2020, France is the second country to come back to the market thisyear. With a tap it added another EUR1.9bn (USD2.2bn) to its initial green sovereign bond from January 2017, which had
been tapped multiple times after. It is likely that there is more to come from the Sovereign side in 2020: Egypt andHungary may join the Sovereign Green Bonds Club in the upcoming months (see green bond outlook).
Financial Corporates had a slow start to the year in January but picked up this month with a total of USD3.1bn comprising
21% of the overall volume in February. Government-Backed Entities made up the largest share (38%), mainly due toSociété du Grand Paris’ (France) EUR2.5bn/USD2.7bn deal, another Programmatic Certification from the giant transport
operator undertaking a decade long infrastructure program to upgrade the Paris rail network. It is Certified against the
Low Carbon Transport Criteria of the Climate Bonds Standard.
Issuance from Non-Financial Corporates only added up to USD2.2bn, compared to USD5.7bn in January and USD5.4bn inFebruary 2019. Although there were deals from 13 different issuers, the sizes were rather small. The largest issuance inthis category came from Telia Company (EUR500m/USD556m), a new issuer from Sweden financing Renewable Energy,
Low Carbon Buildings as well as ICT projects. This makes it the fifth issuer from the telecommunications sector to join thegreen bond market and the second one to raise green financing this month together with Telefónica Europe (Netherlands,
EUR500m/USD556m). Telefónica’s deal, issued through its Dutch subsidiary, was the first green perpetual hybrid bondfrom the sector.

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In addition to ‘traditional’ green bonds, market participants are creating new green structures. After the sustainabilitylinked credit risk transfer by Société Générale last year, Italy’s leading insurer Generali has now created a green insurancelinked securities framework. It will allow the transfer of insurance risk to institutional investors, while the ‘greenness’ of
the security will be characterised by the investment of the collateral in green assets.
The labels and use of proceeds in the green finance universe also continue to diversify: Cadent, the largest natural gas
distribution network operator in the UK, has created a transition bond framework. It aims to contribute to a low carbon
economy with projects that will be financed with the proceeds of bonds issued under this framework – even though such
instruments are viewed as controversial in the market, as previous deals have shown some of these instruments canpotentially contribute positively to the transition to a low carbon economy.
In addition to that, public transport operator TfL (UK) has revised its green bond framework from 2015 and recently
published its 2020 version.
In February, the main share of funds went towards Low Carbon Transport projects with USD5.5bn equating to 37% of theoverall issuance. Just under a quarter (24%) of the proceeds went towards Renewable Energy, followed by Low Carbon
Buildings with 21%. One of the issuers financing building projects was Örebro Kommun (Sweden), which specificallyearmarked a share of the proceeds towards climate change adaptation and resilience projects such as buildings andinfrastructure. The Province of Ontario (Canada), too, financed adaptation and resilience through flood protection andstorm water management.

Worth reading
Climate Bonds’ Sandeep Bhattacharya, India Projects Manager, answers questions around green bonds, adaptation
finance, climate public-private partnerships, sectors of focus & South Asian markets. - South Asia fast track
…and:
•

•
•

ASIFMA, the Asian arm of the industry trade group SIFMA, released its report ‘Sustainable Finance in Asia Pacific Regulatory State of Play’, which provides an overview of sustainable finance developments and the policy
environment in major jurisdictions in the region. - Asifma
Dutch asset manager NN Investment Partners launched a green bond fund that will focus exclusively on corporate
issuers. This follows high demand for the green fund that was created in 2016. - Investment Europe
How the Riksbank can contribute to climate policy – Address by Deputy Governor Anna Breman to Royal Swedish
Academy of Engineering Sciences, Stockholm> 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.

3New issuer spotlight - Certified Climate Bonds
Goldman Sachs Renewable Power (USD500m), USA, came to the market with a 24-year senior secured deal Certified
against the Solar Criteria of the Climate Bonds Standard. Goldman Sachs Renewable Power is owned by Goldman Sachs
Asset Management, which has over USD1.7tn in assets under management. It was set up to acquire and operate
renewable energy projects across the US and is one of the largest owners of distributed solar generation assets in the
country. The proceeds will refinance the acquisition of solar assets across the US with over 1MW of combined capacity.
There will be public reports on a yearly basis, including confirmation that the proceeds are being allocated and managed
appropriately, information on the solar assets and impact indicators such as installed capacity and amounts of energy
generated.

Santander Consumer Bank AS (SEK1bn/USD104m), Norway, completed its inaugural green bond issuance with a 3-year
senior unsecured note. It is Certified against the Low Carbon Transport Criteria of the Climate Bond Standard and also
benefits from an SPO issued by Sustainalytics making this one of few green bonds to receive two third-party reviews. The
instrument will refinance the bank’s private vehicle consumer finance loans. Reports will be publicly available on an annual
basis. The disclosure will include details of the allocation of proceeds, as well as quantitative indicators related to theassets, such as the estimated avoided emissions of the passenger vehicles. An impact report with estimated impacts of thebond has been produced at the time of issuance.

Tohoku Electric Power Company (JPY5bn/USD45.4m), Japan, joined the green bond market with a 10-year bond that is
Certified against the Wind, Marine Renewable Energy and Geothermal Criteria of the Climate Bonds Standard. The
proceeds will finance the company’s developments of onshore and offshore wind projects and geothermal energy
generation plants. Annual reports will be produced disclosing information on the projects financed by this issuance. This
marks the first green bond from a Japanese power utility to receive Certification.

New issuer spotlight
Solar Systems LLC (RUB5.7bn/USD92m), Russia, issued its debut green bond: a 10-year secured instrument that benefits
from an SPO issued by RAEX. One of the largest producers of solar energy in Russia, the company specialises in theconstruction of new solar plants as well as managing and operating them. The project will finance the acquisition,
construction and operation of solar energy projects that can be selected from the company’s overall project portfolio
extending to its subsidiaries and joint ventures. The projects should have established quantitative targets, such as
reduction of CO2 emissions and/or generating electricity from renewable sources.
There will be reporting on both the use of proceeds as well as the impact of the projects on an at least annual basis until
all funds are invested. The use of proceeds reports will include at least a list of approved eligible green projects financed
and the balance of the unallocated proceeds. The impact report will include at least the amount of electricity generated
from renewable sources (kWh) and the reduction/prevention of greenhouse gas emissions (tons of CO2).
Climate Bonds view: This is the third green bond from a Russian issuer and the first one to fully dedicate proceeds towards
renewable energy projects. The share of renewables in Russia’s energy mix is small since the country mainly relies onnatural gas. This instrument can help develop the domestic green bond market and take the next step to offer investment
opportunities to international investors. So far only one instrument has been issued in a foreign currency via RussianRailways – EUR (Certified against our Low Carbon Transport Criteria). The month of issuance also coincides with the
publication of the Competence and Green Expertise Center CoLTI’s first register of green bonds for Russian issuers.

San Diego County Regional Transportation Commission (USD75m), USA, issued its first green Muni bond maturing in 28
years. The proceeds will go towards the Regional Bike Plan Early Action Program, which comprises 40 projects with a totalof around 77 miles of new bikeways. The project aims to enhance neighbourhood connections to schools, shopping
centres and parks, as well as transit stations and other major regional destinations. Many of the projects include bikeways

4that are physically separated from vehicle traffic. The bikeways are also intended to make walking safer and more
comfortable where possible. Until fully expended on the project, there will be annual reporting available on the Electronic
Municipal Market Access (EMMA) website and in the issuer’s annual report.
Climate Bonds view: This is the first project of its kind funded by a green bond in the state of California. Transportation
plays an important role in cutting emissions and encouraging cycling and walking in cities – especially in states like
California that suffer from a relative lack of public transport options and congestion as a result of reliance on personal cars
– is a part of that. We hope this prompts more cities and local governments to encourage and facilitate cycling andsupport bicycle infrastructure.
Japan Finance Organisation for Municipalities (EUR500m/USD556m), Japan, completed its inaugural issuance with asenior unsecured green bond maturing in 7 years and benefitting from an SPO issued by Vigeo Eiris. The organisation is a
joint funding organisation, the objective of which is to provide Japanese local governments with long-term funding at low
interest rates. The net proceeds will be used for loans to local municipalities to finance or refinance existing or future
sewerage projects.
Japan Finance Organisation for Municipalities (JFM) Green Bond Working Group will conduct a survey of its local
government borrowers with respect to the environmental impact of the sewerage projects JFM finances. Projects withpositive responses will form the ‘Effective Portfolio’. JFM will earmark green bond funds towards such projects and willreport the amount of proceeds allocated to each project in the portfolio along with a breakdown by project type annuallyon its website. It is also committed to disclosing project-related KPIs, such as total project costs and population of thecovered area.
Climate Bonds view: Climate Bonds welcomes green bonds such as the one issued by JFM as they allow municipalities toobtain cheap loans to finance projects with positive environmental impacts. We hope to see more funding organisations
come to the market with similar deals, especially to provide funding to entities which might not be able to raise debt in thedebt capital markets. Climate Bonds also supports JFM’s very good level of commitment in terms of reporting – this is
crucial for increasing market transparency.
Arthaland (PHP3bn/USD59m), Philippines, joined the green bond market with a senior unsecured 5-year bond which has
an SPO from Vigeo Eiris. Arthaland provides real estate services in the Philippines and will use the green bond for financing
or refinancing green buildings. This includes the development of new buildings as well as the acquisition and renovation ofcompleted buildings (commercial and residential).
To qualify, the assets must be rated highly against a credible standard such as LEED Gold or BREEAM Excellent. New andexisting commercial and residential buildings that belong to the top 15% of low carbon buildings in their respective
category and local context can also be financed.
Arthaland will provide allocation and impact reports. The allocation report will include the amount or percentage ofallocation to the green portfolio; the share of financing and refinancing reported at the category level; examples ofprojects being financed; and the amount of unallocated proceeds. The impact report will include the type of certifications
and the number of buildings with each type. There will also be estimated annual reduced and/or avoided emissions (intons of CO2e vs. the city/country benchmark).
Climate Bonds view: Despite being the smallest issuance from the Philippines so far, it’s encouraging that another entity
seeks green funds in SE Asia. Arthaland is the first real estate company from this country to issue a green bond. Until now,
proceeds had been allocated mainly towards renewable energy projects.
Vena Energy (USD325m), Singapore, made its green debut with a senior unsecured bond maturing in 5 years. It was
assigned a ‘Green 1’ rating by JCR. The bond will finance projects in the renewable energy space. This includes projects
related to solar energy (including infrastructure, manufacturing and transmission), wind power (offshore and onshore
wind farms, infrastructure and manufacturing, transmission) as well as hydropower.
There will be an annual allocation report on the website until funds are fully allocated, which will be audited by a thirdparty each year. It will include information based on asset type, such as the allocated amount per asset category, thegeographic split per country, and the weighted average age of the project being financed or refinanced including the stage5

of the project (construction or operation), among others. The impact report will include installed capacity (MW), GHG
emissions avoided (CO2e) annually, annual renewable energy production (MWh) and number of households powered per
year.
Climate Bonds view: Non-Financial Corporates from Singapore have not issued many green bonds as yet: Vena Energy marks
the third one, whilst also being the largest by far from this issuer type as well as the first one denominated in USD. This deal
offers international investors the chance to participate in the Asian EM corporate bond market. Finally, this is the first green
bond out of Singapore for which the issuer has acquired a green bond rating.

New issuers continued...
Public Sector••••

Bell County Municipal Utility District (USD4m), USA, 21.9Y original term, assured by BAM GreenStar.
Chengdu Rail Transit Group Co.,Ltd (CNY100m/USD42m), China, 5Y original term, no third-party review.
Jiangsu Communications Holding Co.,Ltd (CNY300m/USD44m), China, 5Y original term, no third-party review. issued in January 2020.
Southside Public Water Authority of the State of Arkansas (USD17m), USA, 30Y original term, assurance by BAM
GreenStar.

Financial Corporates••

Bankinter (EUR750m/USD834m), Spain, 7.7Y original term, SPO provided by Sustainalytics.
Dream Private REIT (JPY2bn/USD18m), Japan, 3Y original term, Green 1 rated (JCR). - issued in January 2020.

Non-financial Corporates•••

Ghelamco Invest (EUR20m/USD22m), Belgium, 7Y original term, SPO provided by Sustainalytics. - issued in
January 2020.
Kajima Corporation (JPY10bn/USD92m), Japan, 5Y original term, SPO and green bond rating (GA1) provided R&I.
Telia Co (EUR500m/USD556m), Sweden, 61Y original term, SPO provided by Sustainalytics.

ABS•

River Green Finance 2020 DAC (EUR196m/USD218m), France 12Y original term, SPO provided by Sustainalytics.

Loans
•

Japan Infrastructure Fund Investment Corporation (JPY4.9bn/USD45m), Japan, 10Y original term, SPO and green
bond rating (GA1) provided R&I.

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

Green bond outlook
Issuer NameCountry

Closing Date

SourceReykjavik Energy (2 deals)

Iceland

03/03/2020

Atlas Renewable Energy
Hypo Vorarlberg
California Infrastructure and Economic Development Bank
Mitsui-Soko
Prudential Financial
New Jersey Educational Facilities Authority

Uruguay
Austria
USA
Japan
USA
USA

04/03/2020
05/03/2020
10/03/2030
10/03/2030
10/03/2020
11/03/2030

NasdaqNasdaqRenewables Now
HYPO
EMMA
JCR
IFR
EMMA

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For March, eight deals have been announced already (see table above). These are mainly from repeat issuers. One ofthem is Atlas Renewable Energy, a Non-Financial Corporate from Uruguay. New to the market and scheduled for the 10th
March is Mitsui-Soko, a transportation company from Japan.
In its latest budget, Hong Kong has assigned funds for green projects after joining the green bond market last year in May
and is continuing to position itself as a green finance hub for the region. The government plans to raise funds for green
transportation projects and to issue green bonds worth HK$66bn over the next five years.
Egypt has started procedures for issuing sovereign green bonds. Under the current market outlook, completing theissuance on schedule would make Egypt the first sovereign from MENA to do so. Another potential new member of theSovereign Green Bonds Club is Hungary. It is currently in talks with investors from Japan and China about a potential
green bond. The green bond framework is planned to be published later in 2020.
German carmaker Volkswagen Group has established its first green bond framework, under which it is getting ready toissue green bonds to finance e-mobility projects, including a multimodal electric vehicle platform. The instruments areplanned to receive Certification against the Climate Bonds Standard. Swedish real-estate developer Bonava has also
created a green bond framework to issue green debt in the future.

Data and references
Repeat issuers in February

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

ADB (Asian Development Bank): EUR40m/USD44.5m - January 2020
AEON Product Finance (Mitsubishi UFJ Trust and Banking Corporation - SPV): JPY5.9bn/USD54m - January 2020
China Longyuan Power Group Corporation Limited: CNY713m/USD103.4m - January 2020
National Grid Electricity Transmission (National Grid): HKD422m/USD54.3m - January 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.

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Excluded
Issuer Name

Amount issued

Issue dateReasonBluehub Loan
Ecuador

USD18.8m
USD56.3m
USD400m30/01/2020
30/01/2020
30/01/2020

Sustainability/Social bond
Sustainability/Social bond
Sustainability/Social bond

Grupo Rotoplas

MXN23bn/USD1.2bn

11/10/2018

Sustainability/Social bond

JetBlue

USD550m

23/02/2020

Sustainability/Social bondJinjiang Industrial Park Development &Construction Co., Ltd.
Korea Housing Finance Corporation

CNY760m/USD108.6m

19/02/2020

Working capital

EUR1bn/USD1.1bn

05/02/2020

Sustainability/Social bond

Madrid

EUR1.3bn/USD1.4bn

27/02/2020

Sustainability/Social bond

Otto

EUR40m/USD44.5m

30/01/2020

Sustainability/Social bondRepublic of Indonesia

USD167.9m
USD1.1bn
CNY600m/USD87m

20/02/2019
20/02/2019
15/01/2020

Not aligned (regular bond)Not aligned (regular bond)Working capital

AUD100m/USD68.6m

19/02/2020

Sustainability/Social bond

Sysco Corp

USD500m

13/02/2020

Sustainability/Social bond

The Community Preservation Corporation

USD150m

03/02/2020

Sustainability/Social bondTonglu Luci Slow Life Experience Zone Tourism
Development Co., Ltd.
Yichang Traffic Investment Co.,Ltd.

CNY620m/USD88.5m

04/02/2020

Working capital

CNY1bn/USD145.3m

17/01/2020

Working capital

Suining Hedong Development Construction
Investment Co., Ltd.
Sydney Airport

Pending
Issuer Name

Amount issued

Issue dateReason

AGENCE FSE DE DEVELOPPEMENTEUR1bn/USD1.1bn

17/02/2020

Insufficient information

Aruhi Corp

JPY5.2bn/USD47.9m

29/01/2020

Insufficient information

California Pollution Control Financing
Authority
CPPIB

USD15.12m

31/12/2019

Insufficient information

EUR511m/USD568m

12/02/2020

Insufficient information

Crédit Agricole

USD15m26/02/2020

Insufficient information

Crédit Agricole CIB

Cyfrowy Polsat

ZAR25m/USD1.8m
TRY8.4m/USD1.4m
ZAR140m/USD9.8m
PLN1bn/USD262m

19/02/2020
10/02/2020
10/02/2020
14/02/2020

Insufficient information
Insufficient information
Insufficient information
Insufficient information

Eco Research Institute Ltd

JPY3bn/USD27.6m

25/02/2020

Insufficient information

Entra ASANOK450m/USD50.8m

07/02/2020

Insufficient information

EUROFIMA

EUR75m/USD83.4m

04/02/2020

Insufficient information

GS Caltex

KRW80bn/USD68.5m
KRW50bn/USD42.8m
KRW130bn/USD111.4m
KRW140bn/USD119.9m
CNY800m/USD116.6m

13/02/2020
13/02/2020
13/02/2020
13/02/2020
20/01/2020

Insufficient information
Insufficient information
Insufficient information
Insufficient information
Insufficient information

Guizhou Water Investment Group Co., Ltd.

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Hangzhou Youxing Technology Co., Ltd.

CNY1bn/USD142.2m

25/02/2020

Insufficient information

Hemso Fastighets AB

EUR55m/USD61.1m

18/02/2020

Insufficient information

HSBC France

EUR20m/USD22.2m

18/02/2020

Insufficient information

Hunan Dongting Resources Holding Group
Co.,Ltd
IBRD

CNY1.2bn/USD218m

17/01/2020

Insufficient information

GBP1.8bn/USD2.3bn

21/02/2020

Insufficient information

IFC

SEK100m/USD10.6m

19/02/2020

Insufficient information

Korea South-East Power Co

USD500m

03/02/2020

Insufficient information

Landsea Green Properties Co., Ltd.

USD200m

21/01/2020

Insufficient information

Lasalle Logiport REIT

JPY3bn/USD27.6m

20/02/2020

Insufficient information

Mid Valley School District Lackawanna County

USD6.35m

27/02/2020

Insufficient information

Modern Land (China) Co., Limited

USD200m

26/02/2020

Insufficient information

Nanjing Metro Group Co.,Ltd

CNY2.8bn/USD398.1m

26/02/2020

Insufficient information

Province de Quebec

CAD500m/USD384.1m

13/02/2020

Insufficient information

Shwe Taung Group

USD44m05/02/2020

Insufficient information

Société Générale

EUR1bn/USD1.1bn

11/02/2020

Insufficient information

Telefónica

EUR500m/USD555.8m

05/02/2020

Insufficient information

VF Corp

EUR500m/USD555.8m

25/02/2020

Insufficient information

News and reports links
Content

Source and Link

Atlas Renewable Energy issues green bond for projects in Chile

Renewables Now

Bonava publ: establishes Green Financing Framework

Market Screener

Breman: How the Riksbank can contribute to climate policy

Sveriges Riksbank

JetBlue signs loan linked to ESG goals

Business TelegraphEgypt to issue sovereign green bonds

Egypt Today

Hong Kong Eyes Green Transport in New Budget

CaixinHow An Asset Manager And A Bank Revolutionized Impact Investing With SustainabilityLinked Credit Risk Transfer
Hong Kong: The 2020-21 Budget

ForbesHungary in Talks with Investors in Japan, China on Sovereign Green Bond Issue

Hungary Today

NN IP unveils corporate green bond fundInvestment Europe

Prudential prices inaugural US insurance green bond

IFR

Q&A with Mr. Sandeep Bhattacharya

South Asia Fast Track

Rise of controversial transition bonds leads to call for industry standards

Reuters

Sustainable Finance in Asia Pacific: Regulatory State of PlayASIFMA

Source9As always, your feedback is welcome!
Watch this space for market developments and any if you have any data requests please send them 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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