Market Blog #20: 7th Feb: USD10.4bn GB issuance for January: 2nd Certified Climate Bondfrom Philippines: 1st EUR green bond from US bank: Sean Kidney’s 2019 Outlook
Highlights:••••

AC Energy issues second Certified Climate Bond from the Philippines
Citigroup issues first EUR-denominated green bond from a US commercial bank
SCBC comes to market with the second green covered bond from a Swedish issuer
Corporates dominate issuance at 46%

Don’t miss:• Climate Bonds Conference just 4 weeks away! 5-7th March, London. Book your spotat the Green Bond Boot Camp, don’t miss the Awards night, more details andregistration here• Sean Kidney writes in IPE on the outlook for 2019
Climate Bonds’ new reports:• Financing low carbon buildings and energy efficiency in the green bond market• ASEAN Green Finance State of the Market 2018
• ASEAN Green Financial Instruments Guide
Green bond deals across the globe - 20192019 Issued

495 BnUSD Bn 10.4 Bn
0100200532 Bn
300

400

500

Total Outsanding
600

Total Issued

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

January at a glance
January green bond issuance reached USD10.4bn. This is 7% lower than the corresponding 2018 figures.
However, Fannie Mae has yet to report its green MBS and credit facility deals.
The US took lead in the first month of green bond issuance, accounting for 41% of volume. Over a third of
the share came from MidAmerican Energy’s USD1.5bn green bond – the largest deal in 2019 so far. Thisbond contributed to taking corporate issuance to the first spot at 46%, with benchmark sized deals also
coming from Algonquin Power & Utilities Corp (Canada), Enel (Italy) and LISEA (France).
Monthly trends show renewable energy dominating use of proceeds at 40% of allocations, with low-carbon
buildings at 28%.

Jan volume by issuer type100%

Jan 2019 allocation of proceeds

Loan
Sovereign80%

Government-backed entity

60%

Energy7% 2%

Buildings

Local government
Development bank40%

Non-financial corporate

20%

40%

23%

USD10.4 Bn

Adaptation

ABS
28%

2019

WaterWaste

Financial corporate

0%

Transport

2018

Industry
ICT> 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
AC Energy (USD225m), Philippines, issued a 5-year senior unsecured Certified Climate Bond, whichobtained Certification under the Solar, Wind and Geothermal Criteria of the Climate Bonds Standard. Dueto high demand for the deal, the issuer reopened the bond for an additional USD75m, which was provided
by IFC as an anchor investment and is expected to close on February 12.
This is the second Certified Climate Bond issued from the Philippines following AP Renewable’s PHP10.7bn(USD226m) Certified Climate Bond in February 2016, which benefited from a Partial Credit Guarantee fromthe Asian Development Bank (ADB). AC Energy is also the third green bond issuer to obtain certification
under the Geothermal Criteria of the Climate Bonds Standard. Proceeds will be used to finance a mix of
new and existing onshore wind, solar and geothermal assets across Southeast Asia and Australia.
The issuer has already returned to market with a second Certified green bond with a 10-year tenor
expected to close on February 12. The ADB acted as one of the main investors with USD20m.
Sustainalytics provided the Pre-Issuance Verification Report.
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New issuers
Algonquin Power & Utilities Corp (CAD500m/USD377m), Canada, issued a 10-year private placement, andobtained a Second Party Opinion from Sustainalytics. Proceeds are earmarked for solar, wind, existinghydro and storage assets/projects. The development of new hydroelectric facilities with a capacity
exceeding 25MW is explicitly excluded from eligible projects.
Climate Bonds view: Canada’s green bond market has been driven by financial corporate and local
government issuance to date, which account for 66% of cumulative issuance. We welcome the entry of a
new corporate in the market and hope to see more companies capitalising on the value of the green label.
For hydropower, it would be good to see issuers reporting on power density ratio or annual emissions(gCO2/kWh) of the asset, rather than focusing on power plant capacity.
➢ Keep an eye out for our upcoming Canada update report due in late February.
BNG Bank (AUD25m/USD18m), Netherlands, issued a 10-year senior unsecured renewable energy bond.
According to the press release, the bond is intended to finance a wind energy project based in theNetherlands.
Climate Bonds view: BNG Bank’s debut deal in the green bond market follows two sustainability bonds
issued in 2016 and 2018. We encourage issuers to disclose details of the financed projects and reporting
practices in a publicly available framework.
Citigroup (EUR1bn/USD1.14bn), USA, issued a 3-year senior unsecured green bond, which benefits from a
Sustainalytics Second Party Opinion. This is the first EUR-denominated green bond from a US commercialbank and second largest following Bank of America’s USD2.25bn deal in May 2018. Proceeds areearmarked for lending on renewable energy, buildings, transport and water projects.
To be eligible, geothermal and biofuel projects are required to emit less thank 100gCO2/kWh. Financing
and refinancing of property-related energy efficiency loans are also eligible under the Green Bond
Framework.
Climate Bonds view: With its debut deal, Citi joins Bank of America and Morgan Stanley as the third US
commercial bank to enter the green bond market. Geothermal eligibility criteria reflect market bestpractice. The issuer has confirmed that all other assets included in the portfolio are compliant with the
Climate Bonds Taxonomy.
LISEA (EUR905m/USD1.04bn), France, issued a two-tranche green project bond (longest dated bond: 35years). Vigeo Eiris provided the Second Party Opinion (not publicly available). Proceeds are expected torefinance part of the High Speed South Europe Atlantic Line between Tours and Bordeaux (LGV SEA).
Climate Bonds view: Transport sector allocations from French green bond issuers have been increasing,reaching 35% of proceed allocations in 2018. Amongst rail companies, both SGP and more recently SNCF
have adopted the streamlined Climate Bond Programmatic Certification process which is particularly suited
to large multiple green bond issuers. This deal also contributes to the upward trend of investment flows inrailway infrastructure. We encourage issuers to make external reviews publicly available to enhancetransparency.
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Odakyu Electric Railway Co (JPY10bn/USD92m), Japan, issued a 3-year senior unsecured green bond,
becoming the first Japanese debut issuer of 2019. Sustainalytics provided the Second Party Opinion andJapan Credit Rating Agency (JCR) awarded the deal a Green 1 Green Bond Evaluation. The deal is expected
to finance new or renewed electric trains, multiple double track projects and renovation of stations.
Climate Bonds view: As of end of 2018, Japan’s green bond market reached a cumulative total of USD9.7bn
with 2018’s issuance volume representing 22% growth year-on-year.
Swedish Covered Bond Corporation (SCBC) (SEK6bn/USD663m), Sweden, issued a 5-year green coveredbond – the second covered bond from a Swedish green bond issuer after Landshypotek Bank’s deal in May
2018. CICERO provided the Second Party Opinion. Proceeds will be allocated to financing mortgages onenergy efficient buildings which have obtained an EPC A, B or C, Miljöbyggnad “Silver”, Svanen, Passivhus,
or Green Building certificate, and on energy efficiency upgrades yielding at least 30% decrease in final
energy use per m2/year. The issuer’s Green Bond Framework includes a detailed list of eligibility criteria forretail and corporate customers.
Climate Bonds view: This deal takes cumulative volumes of green covered bonds to USD8.3bn. As themarket continues to mature, bond structure diversification is expected to continue.

New deals issued prior to 2019
Pepper Group (EUR110m/USD125.1m and AUD75m/USD54.1m), Australia, issued an AUD1.25bn multicurrency RMBS, which includes two green tranches (longest dated tranche: 2.7 years) in December
2018.The green tranches benefit from a Sustainalytics Second Party Opinion.
Eligible projects include green mortgages for properties using building codes from New South Wales,Victoria, and Tasmania combined with BASIX, NatHers and NCC BCA third-party standards. This ensuresthat the buildings are in the top 15% of the market in terms of building energy performance.
To be eligible, properties located in Queensland, South Australia, Western Australia, Australian Capital
Territory and the Northern Territory must comply with the New South Wales’ properties eligibility criteria.
According to Sustainalytics, there are limitations to this approach as “applying the same building codes
across different regions may not lead to the same energy efficiency improvement because of variation[regional] in climate.” However, the SPO provider considers this eligibility proxy a valid approach to identify
top-performing buildings in terms of energy efficiency in the absence of suitable region-specific criteria.
Climate Bonds view: Pepper Group is the second Australian issuer to come to market with an RMBS which
includes green tranches, after NAB’s Certified AUD300m green RMBS tranche in February 2018.
Eligibility criteria for buildings located in New South Wales, Victoria, and Tasmania are aligned with market
best practice. We agree with Sustainalytics that the use of a proxy to identify top performing buildings forregions where specific eligibility criteria cannot be applied yet demonstrates the issuer’s commitment toensuring financed buildings have sound green credentials.

Repeat issuers••••

Advanced Soltech Sweden AB: SEK17m/USD19m
American Municipal Power: 21 tranches for a total of USD55m
BNP Paribas: SEK12m/USD1m
Canadian Solar: JPY6.3bn/USD58m
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California Pollution Control Finance Authority: 2 tranches for a total of USD117m
Digital Realty Trust: EUR850m/USD968m
EBRD (European Bank for Reconstruction and Development): EUR600m/USD690m
Enel: EUR1bn/USD1.1bn
Fabege AB: SEK1.6bn (USD177m)
Indiana Finance Authority: 14 tranches for a total of USD114m
Investa Commercial Property Fund: AUD170m/USD122m – Certified Climate Bond
Klovern: SEK1bn/USD110m – reopening
Modern Land: USD130m – issued in June 2017
SNCF: EUR500m/USD568m – Certified Climate Bond
TenneT Holdings: 3 tranches for a total of EUR500m/USD565m
Terna: EUR250m/USD288m - reopening
Willhem AB: SEK200m/USD22m
Ygrene Energy Fund (GoodGreen): 2 tranches for a total of USD225m
Repeat issuers account for 50% of January issuance012345
Advanced Soltech
TenneT Holdings
Fabege AB
Ygrene Energy Fund
California Pollution Control Finance Authority
Willhem AB
Canadian Solar
Digital Realty Trust
MidAmerican Energy
New issuers

6789
SNCF
Klovern
Investa AM
American Municipal Power
Indiana Finance Authority
EBRDEnel
Terna
BNP Paribas

1011
USD Billions

Pending and excluded bonds
We only include bonds with at least 95% proceeds dedicated to green projects that are aligned with theClimate Bonds Taxonomy in our green bond database. Though, we support the Sustainable Development
Goals (SDGs) 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

Issue dateReason for exclusion/
pending

Kookmin Bank

USD450m

01/02/2019

Sustainability/Social bond

RSB HMAO

RUB1.1bn/USD16.3m

19/12/2018

Not aligned

Itaú Argentina

USD50m04/12/2018

Not aligned

ADB

AUD1bn/USD719m

17/01/2019

Pending5CDL Properties

SGD125m/USD92m

17/01/2019

Pending

Korea Midland Power Co

USD300m

22/01/2019

Pending

Vasakronan

SEK100m/USD11m

24/01/2019

Pending

Vasakronan

SEK500m/USD55m

01/02/2019

Pending

Engie

EUR1bn/USD1.1bn

28/01/2019

Pending

Japan Housing Finance Agency

JPY10bn/USD91m

21/01/2019

Pending

EBRD

SEK2.5bn/USD280m

11/01/2019

Pending

Ontario Power Generation

CAD500m/USD377m

18/01/2019

Pending

Region Skane

SEK700m/USD77m;
SEK300m/USD33m

05/02/2019

Pending

Green bonds closed in February••••••••RCBC (Rizal Commercial Banking Corporation): PHP15bn – February 1
NIB (Nordic Investment Bank): SEK2bn – February 2
Jernhusen AB: SEK150m – February 4
NRW.BANK: EUR500m –February 4
Telefónica: EUR1bn – February 5
CPPIB (Canada Pension Plan Investment Board): EUR1bn – February 6
New York MTA: USD191m – Certified Climate Bond, February 6
Klovern – SEK400m – February 6

Green bonds in the market••••Verizon Communications Inc: USD1bn – closing February 8
AC Energy: USD75m (reopening); USD110m – Certified Climate Bonds, closing February 12
Canton of Basel Stadt: two tranches for a total of CHF200m – closing February 22
Korea Western Power: CHF200m – closing February 27

Investing NewsFTSE Russell has launched a China Green Bond Index series.
HSBC used ESG scores to identify 17 attractive sovereign bond issuers.
Moody's and S&P predict another record-breaking year for green bonds, while BlackRock forecasts sharp
growth in sustainable funds.
Dublin-based asset manager KBI Global Investors (KBIGI) has announced three fossil-free equity funds on
the back of a ballooning divestment movement.

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Green Bond GossipFrance prepares fifth tap of green bond at auction.
Climate Investment Funds plans to issue USD500m green bond in 2019 or 2020 to finance renewable energyprojects.

South Korean bank, KEB Hana Bank, developed a ‘Sustainable Financing Framework’ which obtained a
Sustainalytics Second Party Opinion.
Sustainalytics provided a Second Party Opinion on Flanders’ Sustainability Bond Framework.
Natural gas utility, Korea Gas Corporation, established ‘Sustainability Bond Framework’ under which it isplanning to issue sustainability bonds. The framework obtained a Sustainalytics Second Party Opinion.
Nobina, the leading bus operator in the Nordic region, is looking into issuing a debut green bond.
Orkuveita Reykjavíkur (Reykjavik Energy) will conduct an auction of a new inflation linked green bond series
on February 13. We’re particularly chuffed about this one having identified it as a potential green bondissuer in our Nordic and Baltic Public Sector Green Bond report from February 2018.

Readings & Reports
The Centre for International Governance Innovation recently launched a new paper: Green Bonds: Current
Development and Their Future

The Harvard Business School published an article exploring why green bonds may be our best bet forenvironmental damage control.
IPE’s February issue has a special green finance section on Portfolio Strategy: Green Bonds.
Climate Bonds articles and reports
Leading viewpoint: 2019's green investment picture, an article by Sean Kidney, included in IPE’s special
green finance section
Financing low carbon buildings and energy efficiency in the green bond market
ASEAN Green Finance State of the Market 2018
ASEAN Green Financial Instruments Guide
Opportunities for Sustainable Infrastructure Investments at City Level in Brazil
Spanish version: Bonds & Climate Change - The State of the Market 2018
‘Till next time,
Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in anyform and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial
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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 forcontent on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits orotherwise 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 ofa designated debt instrument. It does not reflect 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 or organisation makes, nor for any investment made by third parties onbehalf 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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