Market Blog #11: USD3.3bn GBs in August: New issuers from Canada, China,
Japan, Singapore & South Korea: California and the Green Bond Pledge
Highlights:••••

USD3.3bn bonds issued from 20 issuers in August
Certified Climate Bonds account for almost half of monthly issuanceFirst green loan from a Singaporean issuer
2nd green bond from a Canadian city and 2nd from the shipping sector

Don’t Miss:• The 400+ assets and projects that could push Australia and New Zealand to their Paris targets.
Climate Bonds latest Green Infrastructure Investment Opportunities Report delves down under.
• California Treasurer signs up to the Green Bond Pledge as part of new green finance push fromworld’s ‘5th biggest economy’.

Coming up:•

Climate Bonds is releasing updated versions of the Climate Bonds Taxonomy and the Green Bond
Database Methodology later in September. The new taxonomy is part of ongoing upgrades to the
Climate Bonds Standard & Certification scheme.

Green bond deals across the globe

2018 Issued

420 Bn94.5 Bn

USD Bn0100

448 Bn

200

300

400

Total Outsanding
500

Total Issued

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

August at a glance
The pace of green bond issuance slowed down in August reaching just USD3.3bn – or 58% below 2017 monthly
figures.
On a brighter note Certified Climate Bonds contributed to almost 50% of issuance volumes, with deals coming from
Australian, US Muni and Brazilian repeat issuers: Monash University, NAB, New York MTA, San Francisco Public
Utilities (SFPUC) and Rio Energy. Both MTA & SFPUC use the streamlined Programmatic Certification process for theirrepeat issuance. NAB’s EUR750m Certified SDG green bond was the largest deal of the month, accounting for 27% of
the total.

2018 monthly issuance volume
15

USD Billions

10
5
0
Jan

Feb

Mar
CBI certified

Apr

May

CBI defined

Jun

Jul

Aug

Excluded

Developed markets drove issuance both by volume and by number of deals, accounting for 80% and 65% of August’s
figures respectively. Emerging market issuance by number of deals surpassed 2017’s monthly share: 30% compared
to 8%. China accounts for over a fifth of bonds in the month, all from financial and corporate new issuers. Rio
Energy’s second Certified Climate Bond makes up 5% of the share. The remaining 5% comes from South Korean
debut issuer Lotte Property & Development.

DM vs EM issuance by count
100%
80%
60%
40%
20%
0%
2018

2017
DM

EM

SNAT

2018’s August figures saw a surge in financial corporate and local government issuance, which accounted for 33%
and 30% respectively, compared to just 17% and 1% in 2017’s monthly issuance. ABS deals, which were the main
driver of volumes in August 2017, have not appeared in this year’s monthly total. However, this is expected tochange once Fannie Mae publishes its August deals.

August volume by issuer type
100%

Loan

90%
80%

Sovereign70%

Government-backed entity

60%

Local government50%

Development bank

40%
30%

Non-financial corporate

20%

Financial corporate

10%

ABS

0%
2018

2017

> The full list of new and repeat issuers here.
> Click on the issuer name to access the new issuer deal sheet in the online bond library.

New issuers
Bank of Jiujiang (CNY1bn/USD145m), China, issued a 3-year green bond, which benefits from a Deloitte assurance
report (not publicly available). The proceeds will be used for 7 proposed projects with wide coverage in energy,
water and waste management, including solar projects to provide affordable electricity, recycling of disposed
batteries, as well as the production of lithium-ion batteries for energy storage purposes. The proceeds will also coverwastewater treatment and increase resilience by improving the city’s drainage infrastructure. It is worth mentioningthat the proposed cogeneration project intends to generate electricity and heat using biomass such as rice straw andbark.
Climate Bonds view: These projects would be expected to result in increased climate resilience at city level andreduced carbon emissions from using alternative generation sources. We are supportive of deals that cover an
extensive range of environmental projects and are pleased to see the issuer has included detailed disclosure on both
estimated proceeds allocation and environmental impact from each project. The proposed cogeneration projectsatisfies our requirement for using bioenergy as an alternative to fossil fuels.

City of Toronto (CAD300m/USD231m) issued a 30-year green debenture, becoming the second city in Canada toissue green bonds after City of Ottawa (November 2017). The debut deal will finance sustainable transport projects
and related infrastructure, such as electric, hybrid and public transport systems.
The Green Bond Framework includes a wider range of eligible project categories: renewable energy, green buildings,
water management, waste management, adaptation/resilience and eco-efficient and/or circular economy principles
integration. Buildings are required to meet at least a Toronto Green Standard Tier 2, LEED Gold certification or andequivalent standard/certification scheme level. Energy efficiency improvements to existing buildings are eligible,
including for private buildings through the Home Energy Loan Program, Hi-rise Retrofit Improvement Support andsimilar initiatives where the City provides loans for energy efficiency retrofits.

Climate Bonds view: This is the third Canadian new issuer in 2018, taking the country’s pool of green bond issuers to
16. Setting a minimum energy efficiency threshold for existing buildings upgrades would further strengthen theeligibility criteria.
The formation of the Canadian Expert Panel on Sustainable Finance, similar to the EU HLEG and UK Green FinanceTaskforce is a positive indicator that policy change and hence additional growth could be on the way.

Chongqing Kangda Environmental Protection Industrial Co., Ltd CNY360m(USD52.7m) , China, issued a 15-year
green ABS, secured on wastewater treatment receivables. CCX provided the green assessment certification and rated
the deal as G-1 (not publicly available). More specifically, the deal securitises the next 15 years’ worth of receivablesfrom 5 subsidiaries of Chongqing Kangda Environmental Protection Industrial Co., Ltd. The proceeds will be used toconstruct new and to upgrade existing wastewater treatment stations for its subsidiaries. The investment targets the
reduction of local pollution, an improvement in the surrounding environment and a reduction in water usage.
Climate Bonds view: This is the first green ABS deal in Chongqing, which expands the market. We also favour deals
which use green revenues and assets as security to finance investment in green assets: this deal couples refinancing
with a commitment to additional green asset financing. We hope to see comprehensive post-issuance reporting andmore information being disclosed. For instance, it would be helpful to understand how treated water is used andwhether recycled water is used for irrigation and industrial purposes rather than treated, potable water.

Hebei Xingtai Rural Commercial Bank (CNY250m/USD36m), China, issued a 5-year green bond, which benefits froma Dongfang Jincheng Credit Management Co Second Party Opinion (not publicly available). The proceeds will be usedin three main categories. Resource efficiency covers the construction of high-efficient facilities, reductions in the
consumption of energy, water, raw materials and other resources for unit products or services, recycling and theutilization of biomass resources. The transport category includes construction and operation of railways, urban railand other infrastructure. Measures such as infrastructure construction to mitigate the adverse effects of climatechange on economic and social development come under adaptation and resilience.
Climate Bonds view: We welcome the issuance of this deal as it promises to allocate proceeds to categories thatgenerate positive environmental impact. While we support this green bond, we would like to see detailed
information being disclosed by the issuer regarding both proposed proceeds allocation and estimated environmental
impact. We also hope to see that the issuer will establish a comprehensive post-issuance reporting system thattracks the allocation of proceeds and impact reporting.

Ho Bee Land (GBP200m/USD256m) issued a green bridging loan - the first green loan from a Singaporean issuer, andthe first green bridging loan. Sustainalytics provided the Second Party Opinion. The bridging loan will finance part of
the acquisition of Ropemaker Place, a commercial building located in London. The property has obtained a LEED
Platinum pre-certification and a BREEAM excellent certification.
Climate Bonds view: This is the fourth Singaporean green bond issuer to enter the market, and the second in 2018
after Sindicatum Renewable Energy, taking the country’s cumulative issuance to USD887m.

Japan Excellent (JPY4bn/USD36m), Japan, issued a 10-year green bond, which benefits from a Sustainalytics Second
Party Opinion. Proceeds are entirely allocated to buildings which obtain the top three levels of third-party
certifications such as: 3, 4 or 5 stars under the DBJ Green Building Certification or B+, A or S rank under the CASBEE
Certification.

Climate Bonds view: Green building certifications are an important indicator of a property’s green credentials.
However, we encourage JEI to adopt more ambitious standards to provide substantial environmental impacts.
Disclosure of key environmental parameters is essential to quantify environmental impacts, and perhaps create more
stringent standards compatible with a 2-degree scenario. For this reason, we encourage companies to provide
quantitative indicators to support disclosure of detailed impact reports.

Lotte Property & Development Co (USD200m) issued a 3-year senior unsecured green bond, becoming the first
South Korean green bond issuer from the real estate sector. The deal benefits from a Sustainalytics Second Party
Opinion. Proceeds of the deal will be allocated to commercial buildings and transport infrastructure. Commercial
properties are eligible if they have been constructed/refurbished in 2017 or after and have obtained a LEED Gold or
equivalent certification. The projects must also contribute to the improvement of professional conditions of lowincome workers. Eligible projects under the transport category include pedestrian, public bicycle and public bus
infrastructure.
Climate Bonds view: This is the fourth green bond from a South Korean issuer this year taking the country’s total for2018 to USD1.8bn, which already represents a 73% increase on the country’s issuance in 2017.

Mitsui O.S.K. Lines (MOL) (JPY5bn/USD45m), Japan, issued a 5-year senior unsecured green bond. This is the second
issuer from the shipping sector to enter the market after Nippon Yusen Kaisha (NYK) in May 2018. As with NYK’s
green bond, proceeds will finance and refinance LNG-fuelled ships, LNG-bunkering ships, ballast water management
systems and SOx scrubber systems. Under its Green Bond Framework, MOL has committed to ensure the financed
vessels will not be used to transport products that relate to controversial activities, including, but not limited to, coal,tar sands and oil shale.
Additionally, Upgraded Propeller Boss Cap Fins and the Wind Challenger Project are also eligible under MOL’s.
According to the issuer, the upgraded PBCF is expected to yield 5% energy savings compared to vessels unequippedwith the technology. The Wind Challenger Project is a research project led by the University of Tokyo focused on thedevelopment of wind propelled ships through the use of a rigid sail system. MOL aims at deploying the technology on
cargo-carrying vessels to achieve up to 50% energy savings.
Climate Bonds view: We are pleased to see that the issuer has quantified the level of emissions reductions expected
for each eligible project and committed to providing annual impact reporting based on operational data. Investing in
the Wind Challenger Project is a positive step towards incorporating renewable technologies in vessels. So is thecommitment not transport fossil fuel products other than LNG on the LNG bunkering ships.
As we pointed out for NYK’s green bond, switching to LNG-fuelled vessels is not enough to comply with a 2-degree
decarbonisation trajectory in the long-run. However, the projects financed by the deal are currently the lowestemission asset option until other renewable fuels become commercially viable. It is nonetheless important to ensure
the vessel design is flexible enough to avoid fossil fuel lock-ins in the future. Our special briefing provides more
information on our decision to include bonds financing LNG-fuelled ships and LNG-bunkering ships in our database.

Qingdao Guoxin Development Group Co., Ltd. (CNY1.45bn/USD212m), China, issued a 5-year green private
placement. Proceeds will be allocated to LEED Gold certified green buildings. In addition, these projects will adopt
advanced energy-saving technologies and use environment-friendly building materials.
Climate Bonds view: We are pleased to see the projects have been awarded LEED Gold. Even with limited
information disclosure for this private placement, we still acknowledge the potential environmental benefits that thisdeal could bring to the local community. We hope that the issuer will make proper use of the proceeds and wewould like to see a higher level of information disclosure and relevant post-issuance reporting.

State of Michigan (USD149m) issued a 7-tranche US Muni green bond (longest dated bond: 5 years) labelled as“Environmental Program Bonds”. The deal will finance environmental and natural resource protection programs,
including: land remediation and redevelopment of contaminated sites, protection and improvement of water quality,
pollution prevention, lead contamination abatement, reclaiming and revitalising community waterfronts, state park
infrastructure improvement, enhancement of local recreational opportunities, and remediation of contaminatedsediments in lakes, rivers and streams.
Climate Bonds view: The State of Michigan’s debut Environmental Program Bonds were issued in June 2016 and theissuer came to market once more in September 2017. However, we had not picked up the issuer prior to its 2018
deal due to the less typical bond label. Earlier this year we expanded the scope of labels we consider for green
bonds.

TMB Bank (USD60m) issued a 7-year private placement in June 2018, becoming the first Thai issuer to enter themarket. Proceeds will finance solar, waste to energy, biomass and bagasse projects. To be eligible, biomass projects
exclusively use sustainable biomass feedstocks.
Climate Bonds view: The deal had previously been classified as pending due to insufficient information on proceed
allocation. Information provided by the IFC, sole investor in the deal, confirmed that the eligibility categories arealigned with the Climate Bonds Taxonomy.

Wuxi Huaguang Boiler Co (CNY265m/USD39m), China, issued a three-year green ABS in July. The deal is secured onrevenues from the heat and power supply services of its subsidiary Huilian Co., which operates a combined power
plant in Wuxi city. The proceeds will be used for two waste to energy projects, including the Gongzhuling refuse
incineration project and the Leping refuse incineration project. Specifically, the Gongzhuling project is estimated todeal with 800 tonnes of daily household waste from Gongzhuling city and surrounding areas. In comparison, theLeping refuse incineration project is designed to have the same capacity. In addition to building boilers, the Leping
project also plans to build 10 waste stations and other supporting facilities.
Climate Bonds view: We support such green bond issuance since it has multiple benefits of reducing household
waste, generating clean energy as well as improving air quality due to reduced carbon emissions. However, we would
like to see more disclosure about relevant information such as bond prospectus. We also hope the issuer will closely
monitor this deal and publish timely post-issuance reporting.

Repeat issuers
•
•
•
•
•
•
•
•
•
•

San Francisco Public Utilities: USD408.2m - Certified Climate Bond
Fabege AB: SEK700m/USD76.8m; SEK300m/USD32.9m
Monash University: AUD116m/USD86m
NAB: EUR750m/USD878m
New York MTA: USD207m - Certified Climate Bond
Rio Energy (Copacabana Geração de Energia e Participações S.A): BRL12m/USD30.9m - Certified Climate
Bond
Sindicatum Renewable Energy: PHP1.1bn/USD20m
State of Michigan: USD149m
Vasakronan: SEK550m/USD60.4m; SEK100m/USD11m; SEK700m/USD76.8m
World bank: INR80m/USD1m

Repeat issuers account for 62% of issuance

0

1

2

3

USD Billions

Rio Energy

Vasakronan

Fabege AB

State of Michigan

NAB

New York MTA

Sindicatum Renewable Energy

World Bank (IBRD)

Monash University

San Francisco Public Utilities

New issuers

4

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.
In this issue of our market blog we provide a more extensive list of social / SDG / sustainability bonds that have been
excluded from our green bond list in 2018.
Issuer Name

Amount issued

Issue dateInsikt

USD25m31/07/2018

Reason for exclusion/
pending
Social covered bondIndustrial Bank of Korea

USD500m

02/08/2018

Social bondWorld Bank (IBRD)

CAD1bn/USD770m

03/08/2018

World Bank (IBRD)

CAD60m/USD46m

31/05/2018

World Bank (IBRD)

CAD1bn/USD804m

17/01/2018

IFC

AUD300m/USD234m

15/03/2018

Sustainable Development
Bond
Sustainable Development
Bond
Sustainable Development
Bond
Social bond

Garanti Bank

USD75m

18/06/2018

Social bond

NWB Bank

EUR500m/USD606.5m

27/04/2018

Affordable housing bondCouncil of Europe Development
Bank

EUR500m/USD620m

27/03/2018

Social bondIndiabulls Housing Finance

INR1bn/USD15.7m

01/01/2018

Affordable housing bond

Guangdong Guangye Group Co

CNY1bn/USD144.2m

15/08/2018

Working capital

Shuye Environmental
Technology Co

CNY200m/USD29m

14/08/2018

Working capitalJapan International Cooperation
Agency (JICA)

JPY15bn/USD135.8m;
JPY10bn/USD90.5m
AUD125m/USD91.1m

28/06/2018

Social bond

30/08/2018

Sustainability bond

Guangdong Guangye Assets
Management Co.,Ltd.

CNY1bn/USD146m

15/08/2018

Not aligned

GuangDong ShuYe
Environmental Technology Co.,Ltd
Anji County Urban Construction
Investment Group Co

CNY200m/USD29m

13/08/2018

Not aligned

CNY500m/USD72.7m

17/08/2018

Working capital

Wuhan Metro

CNY2.13bn/USD309.7m

17/08/2018

Working capital

China Three Gorges

CNY2.5bn/USD366m;
CNY1bn/USD146m
USD43m; USD18m

03/08/2018

Pending

28/08/2018

Pending

Corporacion Andina de Fomento(CAF)

USD30m21/08/2018

Pending

Shinhan Bank

KRW200m/USD0.2m

30/08/2018

Pending

Fairfax County Economic
Development Authority
Bank OCBC NISPUSD10.8m

01/08/2018

Pending

USD150m

01/08/2018

Pending

South Carolina Jobs-Economic
Development Authority

USD11m

16/08/2018

Pending

Bank of Dongguan

CNY2bn/USD293m

22/08/2018

Pending

Urumqi City Construction
Investment (group) Co.,Ltd.

CNY1.5bn/USD220m

23/08/2018

Pending

Bank Australia

Grand Forks County

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

Willhem AB: SEK800m, closing September 3
Vasakronan: SEK750m, closing September 4
SSE: EUR650m, closing September 4
KBN: AUD450m, closing September 5
City and County of Honolulu Series 2018F, 2018E, 2018D, 2018C, closing September 5
Ricoh Leasing Company: JPY10bn, closing September 7
Independent Administrative Institution Japan Student Services Organization: JPY30bn, closing September 7(social bond)
Macquarie University: AUD250m, closing September 7 (sustainability bond)Deutsche Hypo: EUR500m, closing September 10
Mitsui O.S.K. Lines: JPY5bn, closing September 10
Massachusetts Clean Water Trust: Series 21, closing September 12
Encevo SA: EUR250m, closing October 2018
UmweltBank: up to EUR40m green bond
UGE International: green project bondBusiness Venture Partners (BVP): EUR7.5m
State Bank of India: Certified Climate Bond

Investing NewsThe Hong Kong Green Finance Association announced it will host the Green Finance Forum and an inauguration
ceremony to officially launch the Association on 21 September.
California becomes the first state to pledge to use green financing to combat climate change as Treasurer Chiang
commits to Green Bond Pledge.
The UK government announced it will co-fund a new Green Finance Institute with the City of London Corporation tochampion sustainable finance in the UK and abroad.
World Bank to fund the five-year ‘Punjab Green Development Programme’, aiming at supporting priority green
investments in both the public and the private sectors.
The IFC and the State Bank of Pakistan have signed an advisory agreement to support green banking in Pakistan.
Malaysia’s BIB Investment Management launched the world’s first ESG sukuk fund.
The Philippine Securities Exchange Commission approved the green bond framework for local retail offerings underthe Association of Southeast Asian Nations (ASEAN) initiative.
Dublin has been selected as the European hub of the Financial Centres for Sustainability (FC4S) network. The Climate
Bonds Initiative is a partner of the FC4S network.

Green Bond Gossip
Sunrun is planning its second Solar ABS securitisation.
Sumitomo Mitsui Trust Bank has obtained a Sustainalytics second party opinion for its green bond framework.
NordLB plots first ‘really green’ covered bond under Luxembourg law.
Hitachi Zosen plans to issue JPY5bn in green bonds in September to finance the construction and management ofwaste-to-energy plants.
Urja Global to raise USD500 million via green bonds for financing renewable energy projects and e-rickshaws.
Texas officials are considering partnering with private sector to design a new type of bond to finance USD15bn worthof storm-resilient infrastructure.
The State Agency for Energy Efficiency and Energy Saving of Ukraine is looking to develop Ukraine’s green bondmarket to finance energy efficiency projects.

Reading and Reports
The latest IFR Green Financing Roundtable report discusses recent developments in green finance and outlines thenext steps that need to be taken as issuance becomes more widespread.
CoLTI, a Russian national infrastructure investor association, has recently published their quarterly review:
Sustainable Developments and Green Investments (for Russian speakers).
The latest podcast from Bulletin with UBS puts green bonds in the spotlight.
Rienergia has published a series of articles (in Italian) exploring on the future of coal in Europe, with a focus on
Poland, Germany, France and the UK:•••

La Polonia, l’Europa e il dilemma del carbone
Quale futuro per il carbone in Germania?
Francia: l’era del carbone sta finendo•

UK: dal carbone all’energia pulita senza passare dal gas

Climate Bonds Reports
The Green Infrastructure Investment Opportunities Australia & New Zealand report identifies projects andassets that could be considered green.
The Australia & New Zealand green finance country briefing analyses the countries’ green bond issuance todate and identifies potential growth areas.

Moving Pictures
California first to sign Green Bond Pledge to fight climate change: KKFX TV report 1:53secs.
Watch how these plastic eating caterpillars could help save the planet.
Take 1:18 mins to discover which country is ready for an electric car revolution.
Watch how Pakistan, China, India and African countries are creating new forests.

‘Till next time,
Climate Bonds

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information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no
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