Market Blog #12 Sept ‘18: GB issuance passes USD100bn mark for 2018: Stateof the Market 2018 preview: Green Bond Pledge: GCAS, Gossip and more!
Highlights:
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USD101.1bn green bond issuance for 2018 to date
USD3.4bn green bonds monthly volume as of September 20th
Encavis AG issues Certified green Schuldschein
New issuers from China, Hong Kong, Japan, Sweden
Fannie Mae publishes Green MBS and Credit Facility deals for August totalling
USD1.7bn

Don’t miss:••Global launch of the State of the Market 2018 and of the revised Climate Bonds Taxonomy Guide at
the New York Climate Week – more information on the event here.
The two big Green Bond Pledge announcements including Mexico City signing the Pledge and thelaunch of the Global Green Bond Partnership at the Global Climate Action Summit in San Francisco
last week.
Are you a green bond issuer, have you signed up?

Green bond deals across the globe

2018 Issued

425 Bn100.5 Bn

USD Bn0100

200

453 Bn
300

400

500

Total Outsanding
Total Issued

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

At a glance
Green bond issuance for 2018 just passed the USD100bn benchmark! EIB’s EUR500m first Sustainability
Awareness Bond which closed on September 13th took 2018 global figures from USD99.9bn to USD100.5bn.
The USD100bn annual benchmark was broken last year for the first time and announced at COP23 in lateNovember.
As of September 20th, monthly green bond issuance totalled USD3.4bn. 38% of issuance came from
corporates, with SSE’s EUR650m second green bond accounting for over a fifth of the volume.
Developed markets led issuance at 79%, with benchmark deals including Deutsche Hypo’s EUR500m third
green covered bond. Beijing Infrastructure Investment’s CNY1bn debut bond is the only deal fromemerging markets, accounting for 4% of total volumes.

Monthly volume by issuer type
20
Loan

16

Sovereign
Government-backed entity

12

Local government

USD Billions

8

Development bankNon-financial corporate

4

Financial corporate
ABS

0
1

2

3

4

5

6

7

8

9

State of the Market 2018 - preview
Climate Bonds Initiative’s flagship report ‘Bonds and Climate Change: State of the Market 2018' will belaunched on September 24th at HSBC’s Finance for Global Change Forum at the Climate Week in New York.
The report provides an analysis of the climate-aligned and labelled green bond universe, highlighting
investment opportunities to finance climate-aligned assets within the following climate themes: clean
energy, low-carbon transport, water management, low-carbon buildings, waste management andsustainable land use.
While previous reports focused on identifying fully-aligned issuers that derive 95% or more of revenues
from ‘green’ business lines, this year we expanded the scope to include strongly-aligned issuers that derive
75-95% of revenue from green business lines.
Separate research was conducted on fully-aligned US Municipal agencies to identify their total outstanding
unlabelled bonds. This figure is only included in the overall climate-aligned figure and not in the remainderof the report analysis.

The climate-aligned bond universe
Fully-aligned US
Munis
17%
Strongly-aligned
22%Green bonds
27%

Fully-aligned
34%

Multi-sector, 13%

Energy, 6%

Buildings, 5%Transport, 2%
Water, 1%
Land use, <1%

Waste, <1%
Industry, <1%
Adaptation, <1%> 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
Encavis AG (EUR50m/USD58m), Germany, issued a 10-year green Schuldschein, which obtained a Pre-

Issuance Certification under the Solar Criteria of the Climate Bonds Standard. This is the third Certified
green Schuldschein to come to market following deals from Nordex and Volkswagen Immobilien in March
2016 and May 2018 respectively. Proceeds will primarily be allocated to finance the acquisition of solarparks from the partnerships with Solarcentury and Power Capital and Ireland Strategic Investment Fund(ISIF), with a total generation capacity of approximately 1.3GW in the next two years. As part of the sameacquisition pipeline, in March 2018 Encavis AG took over a solar park with a 44MW generation capacity in
the Netherlands.
ISS-oekom provided the Pre-Issuance Verification Report.

New issuers
Beijing Infrastructure Investment (CNY1bn/USD146m), China, issued a 3-year green bond, benefiting from a

Zhongcai Green Financing Second Party Opinion (not publicly available). Proceeds will be fully allocated tothe construction and operation of 7 different metro lines in the city of Beijing. The issuer has disclosed
expected short term, medium term and long term climate and environmental impacts for each project.
Climate Bonds view: We are pleased to see Beijing Infrastructure Investment, a state-owned railway andinfrastructure financing company, entering the green bond market to finance Beijing’s metro system. The
issuer’s CNY10bn green bond programme has been approved by the regulator, so we are expecting to see
more green bonds issued under the same framework.

Leo Paper Group Finance Limited (HKD350m/USD45m), Hong Kong, issued a 4-year green loan. According to

the Green Loan Framework, proceeds will be allocated to the following project categories: Industrial
efficiency (e.g. LED installation), waste gas management, reuse of industrial waste recycling of food waste,wastewater treatment, green buildings, reuse of grey water and sustainable use of natural resources. The
framework was awarded the Green Finance of Pre-Issuance Stage Certificate issued by the Hong Kong
Quality Assurance Agency (“HKQAA”).
Climate Bonds view: This is the first green loan from a Hong Kong issuer and first from the communications
and printing sector. This raises Hong Kong’s 2018 issuance to date to USD823m.

Ricoh Leasing Company (JPY10bn/USD91m), Japan, issued a 5-year senior unsecured green bond, whichobtained a Green 1 rating from the Japan Rating Agency. The deal will refinance 11 solar power generating
facilities located in Japan through the repayment of previously issued Commercial Paper. The assets are
expected have a total average power generation of 30,001MW and reduce emissions by 15,701t per
annum.
Climate Bonds view: This is the first Japanese leasing company to enter the green bond market, taking thecountry’s total issuance for 2018 to USD803m. The replacement of short-term funding (commercial paper)with long-term financing (10-year green bond) is better aligned to the asset life and provides a usefulexample how refinancing in the green bond market can reposition financing: in this case, by extending thematurity profile.

Taishin International Bank (USD20m), Taiwan, issued a 30-year green bond in July 2018. The deal benefits

from a Deloitte Assurance report (not publicly available). Bond proceeds will be fully allocated to a wide
range of projects, including wind and solar farms, energy technology and industrial efficiency
improvements, smart grids, green buildings, greenhouse gas reduction, waste reuse and recycling, as wellas other projects that are permissible under the Taipei Exchange’s green bond catalogue, such as water
efficiency, treatment and recycling.
Climate Bonds view: We excluded this bond in July due to the potential use of proceeds in controversial
projects. However, the issuer has confirmed that the bond is not going to finance any projects related toclean coal or fossil fuels, which were mistakenly put into the prospectus. Accordingly, we have moved thisbond to our included green bond list. Taishin International Bank has also renewed the prospectus on
Taiwan’s designated information disclosure platform-Market Observation Post System (MOPS).

Urumqi City Construction Investment (group) Co., Ltd. (CNY1.5bn/USD220m), China, issued a 5-year green

private placement in August 2018. The deal has limited disclosure. However, a summary of the use ofproceeds published on the Wind Financial Terminal indicates that that bond is going to finance 12 projects.
11 are dedicated to bus systems in Urumqi city, including bus lane construction, bus stations/terminals, a
bus signalling system, BRT, and bus parking. The other project is expected to improve the comprehensive
environmental management in a natural park.
Climate Bonds view: Although the bus lane and dedicated bus parking stations don’t provide climate
benefits directly, they act as essential infrastructure to support bus operations. Especially for this deal,
these assets are an integral part of the overall bus projects. Therefore, we included this bond in our
database and will update any new information once it’s made available.

Willhem AB (SEK800m/USD88m), Sweden, issued a two-tranche senior unsecured green bond (longest dated

bond: 5-years). The deal benefits from a CICERO Second Party Opinion. Proceeds are earmarked forfinancing green buildings, renewable energy and clean transportation.
Renewable energy projects include solar, geothermal, wind power and bioenergy. Clean transportation
includes electric vehicles and related infrastructure, as well as provision of car pools. CICERO awarded theclean transportation category a “Light Green”, noting that eligible car pool projects could include fossil fuelcars.
For energy efficiency in buildings, the target is to decrease the energy use per year by 25% with respect tothe benchmark required by Swedish codes and regulations, or to obtain certification from one of thefollowing schemes: LEED (minimum Gold), BREEAM (minimum ‘Very Good’), or Miljöbyggnad (minimum
Silver), Svanen, EU Green Building and Fedy-12 (Mini-energy building).
Climate Bonds view: Car pool services using fossil-fuel based vehicles are not automatically aligned to the
Climate Bonds Taxonomy and are usually considered on a case-by-case basis according to whether theymeet the universal gCO2/p-km (passenger per kilometre) threshold (p12 of Low Carbon Transport Criteria).
Given Willhelm AB is a real estate company and car pools are just a subset of one of three eligible
categories, we decided to include the bond with the assumption that less than 5% of proceeds will beallocated to this project type. However, we will closely monitor the bond’s proceed allocation and impact
reporting to ensure that either the vehicles meet the universal threshold (75gCO2/p-km in this case) or that
only a maximum of 5% of proceeds have been allocated to finance this project type.

Greenalia Biomass Power Curtis Teixeiro (EUR125m/USD145m) , Spain, issued a green loan in July 2017. S&P

Global Ratings awarded the deal an E1/77 Green Evaluation. Proceeds will be allocated to the constructionof a biomass plant in the town of Teixeiro (Province of La Coruña, Spain). The plant will have the capacity of
approximately 50MW and is expected to generate 324GWh per year from forest waste collected within a
100km radius of the new installation.
According to the issuer, this project will be beneficial for the maintenance of forests in the area and theprevention of fires, while encouraging the collection of small-sized waste that is normally discarded forindustrial use. The biomass used by the plant will be FSC or PEFC certified. The issuer has committed todisclosing sulphur dioxide (SO2), nitrogen oxides (NOx), and carbon monoxide (CO), among other metrics,
once the plant becomes operational. S&P Global Ratings notes that the deal lacks a clear project selection
process based on calculations of expected environmental impacts.
Climate Bonds view: This is the second** Spanish issuer to finance a biomass project through a green loan.
It’s good to see the issuer committing to reporting the environmental impacts of the project. We agreewith S&P Global Ratings that providing a project selection criteria would enhance the deal’s transparency.

Repeat issuers
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Atrium Ljungberg: SEK650m/USD71m
City and County of Honolulu: USD190m
Deutsche Hypo: EUR500m/USD579m
EIB: EUR500m/USD579
Fabege: SEK200m/USD22m; SEK400m/USD44m
Fannie Mae: DUS MBS USD1.7bn and Credit Facility USD11.4m - August
KBN: AUD450m/USD324m

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Massachusetts Clean Water Trust: USD163m
Mitsui O.S.K. Lines: JPY5bn/USD45m
Rio Energy (Copacabana Geração de Energia e Participações S.A): BRL128m/USD30.9m (Certified
Climate Bond) - August
SSE: EUR650m/USD753m
SFF: SEK920m/USD102m
Vacse: SEK400m/USD44m
Vasakronan: SEK750m/USD83m

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

Amount issued

Macquarie University

AUD200m/USD142.1m; 07/09/2018
AUD50m/USD35.5m
JPY30bn/USD270.2m
07/09/2018

Independent Administrative
Institution Japan Student
Services Organization
World Bank (IBRD)

Issue dateReason for exclusion/
pending
Sustainability bondSocial bond

SEK1bn/USD110.4bn

07/09/2018

SDG bond

University of North Dakota

USD93m13/09/2018

Not aligned

Guanghzou Yuexiu Holding
Ltd
Bank of Hebei

CNY1bn/USD147m

03/09/2018

Working capital

CNY2.5bn/USD365m

10/09/2018

Not aligned

Hunan Expressway Co

CNY540m/USD79m

24/08/2018

Not aligned

Iren

EUR500m/USD585m

19/09/2018

Not aligned

African Development Bank(AfDB)

05/09/2018

Pending

Bank of Guiyang

BRL4.8nm/USD1.16m;
BRL5m/USD1.2m;
IDR30bn/USD2bn
CNY5bn/USD732m

31/08/2018

Pending

Fudian Bank

CNY3.5bn/USD511m

30/08/2018

Pending

AFD (Agence Française deDéveloppement)

EUR500m/USD584m

17/09/2018

Pending

Green bonds in the market••

Brookfield Renewable Partners: CAD300m, closing September 20
City of Vancouver: CAD85m, closing September 21

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Hitachi Zosen Corporation: JPY5bn, closing September 21
Canton of Basel Stadt: CHF231,000, closing September 24
China Construction Bank Corporation (Luxembourg Branch): EUR500m, closing September 24(Certified Climate Bond)
Sumitomo Forestry Co., Ltd: JPY10bn, closing September 27
Cassa Depositi e Prestiti SpA: EUR500m, closing September 27
State Bank of India (London Branch): USD650m, closing September 28 (Certified Climate Bond)
City of Saint Paul, Minnesota: closing October 10
Encevo SA: EUR250m, closing October 23

Investing News
CCDC launched a domestic green bond index series on the Luxembourg Stock Exchange. The series includes
the ChinaBond China Climate-Aligned Bond Index, which requires either that the proceeds of the selected
green bonds align entirely to the PBOC Green Bond Endorsed Project Catalogue and the Climate Bonds
Taxonomy, or that at least 95% of the issuer’s main business comes from green industry projects alignedwith the PBOC Green Bond Endorsed Project Catalogue and the Climate Bonds Taxonomy.
The Global Green Bond Partnership (GGBP) was launched on Thursday at the Global Climate Action Summit
and aims to support efforts of sub-national entities such as cities, states, and regions, corporations andprivate companies, and financial institutions to accelerate the issuance of green bonds.
Veolia, a waste management company, plans to include two fully-electric bin lorries in its vehicle fleet. The
lorries will be charged with power derived from waste collected by the company.
Luxembourg Green Exchange and Mexico City are the latest signatories to the Green Bond Pledge. Local
Government Super (LGS), the industry pension fund for NSW local government employees, also joined the
US state treasuries of California, New Mexico and Rhode Island and the cities of Asheville, San Francisco
and King County as founding signatories to the Green Bond Pledge.
The Nairobi Securities Exchange (NSE) rolled out a legal framework to support green bond issuance.
Eleven companies - including Tesco, Sky and Siemens - have pledged to power their London-premises with
100 per cent renewable energy, as Sadiq Khan announces the first London Climate Action Week.

Green Bond Gossip
Vodafone recently published a Green Bond Framework, which obtained a Sustainalytics Second Party
Opinion.
Ireland published a Green Bond Framework for Irish sovereign green bonds and Sustainalytics provided theSecond Party Opinion. The roadshow for the first sovereign is planned for coming weeks.
Tokyo Century developed a green bond framework which obtained an G1 Green Bond Assessment and a
Second Party Opinion from R&I.
Region Occitanie obtained a Vigeo Eiris Second Party Opinion for its Green Bond Framework.
Korea Land & Housing Corporation developed a Green Bond Framework which benefits from a
Sustainalytics Second Party Opinion.
Sustainalytics has provided a Second Party Opinion for Mitsubishi UFG Financial Group’s new Green Bond
Framework.

BBVA Bancomer plans to issue a green bond under BBVA’s SDG Bond Framework. Sustainalytics provided a
Second Party Opinion to ensure the eligibility categories align with BBVA’s framework, as well as the Green
Bond Principles.
The Canadian Imperial Bank of Commerce (CIBC) developed a CIBC Women in Leadership Bond Framework
which benefits from a Sustainalytics Second Party Opinion.
DKB Bank developed a new Social Bond Framework and is planning its inaugural social covered bond. ISSoekom provided the Second Party Opinion.
DZ Bank AG is planning to issue EUR250m labelled green bond. S&P Global Ratings assigned the deal an
E1/85 Green Evaluation.

Reading and Reports
Read the closing media statement from the Global Climate Action Summit, summarising majorannouncements. Scroll down to Transformative Investments for the green finance and investor content.
Latest Harvard Business Review podcast/article: Should US companies still care about the Paris climatechange agreement.
Volans recently released the white paper Our Carbon Future: reversing global warming while delivering
shared prosperity, highlighting pathways to scale up the transition to a new carbon economy.
EIB’s report Financing innovation in clean and sustainable mobility finds that green mobility in Europe hasan annual financing gap of between EUR5.5bn and EUR13bn.
Corporate Knights in Canada have just released a new report detailing the benefits of investing in low
carbon and sustainable companies. It’s all in Capitalizing on Sustainable Finance: A growth opportunity for
Toronto’s financial sector.
The Insurance Bureau of Canada has just released Combatting Canada’s Rising Flood Costs: Natural
infrastructure is an underutilized option.

Moving Pictures
Watch how cities around the world are using plastic bottles as a means of payment for public transport.
Take 1:24mins to discover how Dutch neighbourhoods are producing power from renewable energy.
Watch how China is ramping up its renewable energy capacity.
A quick report from Justine Leigh-Bell, our Director of Market Development, on last week's GCAS in San Francisco.
0:52 secs.

‘Till next time,
Climate Bonds**Editor's Note: The original post listed Greenalia Biomass Power Curtis Teixeiro as the first Spanish issuer to financea biomass project through a green loan. This is incorrect. The first was Ence Energia. They (Greenalia) are thesecond.
{}The original post included Iren as a repeat issuer. Upon further analysis they have now been reclassified as excluded
due to more than 50% of bond proceeds allocated to natural gas cogeneration. The repeat issuer list and monthly
figures have been adjusted to reflect this change.
Apologies for any inconvenience this may have caused.

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 and no 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 notreflect the credit 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 ororganisation 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.