Market Blog #10: USD11.6bn GBs in July: First Certified Climate Bond fromColombian issuer: Updated H1 figures
Highlights:•••••

USD11.6bn bonds from 24 issuers in July
First Certified Climate Bond from a Colombian issuer
Second C-PACE securitisation worldwideFannie Mae publishes Green MBS deals for June: USD2bn
Updated H1 2018 figures: USD76.9bn➢ Climate Bonds will release updated versions of the Climate Bonds Taxonomy and Green Bond

Database Methodology in August – more details to come, so watch this space!
Green bond deals across the globe

2018 Issued

88.9 Bn

USD Bn0413 Bn
100200441 Bn
300

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

400

Total Outsanding
500

Total Issued

July at a glance
Fannie Mae’s USD2bn Green MBS deals for June have taken our H1 2018 figures to USD76.9bn, 9% up on
H1 2017. The US leads country issuance accounting for around a quarter of volumes, followed by China(12%). Supranationals and Belgium each represent 8% of H1 volumes. Use of proceed distribution remainslargely unvaried for H1 2018 compared to H1 2017: Energy (35%), Buildings (30%) and Transport (16%) still
occupy the top three spots for sector allocations.

Green bond issuance in July totalled USD11.6bn, a 9% increase compared to 2017’s monthly figures.
Developed markets issuance prevails at 75% when accounting for deals by volume, with France’s sovereign
Green OAT tap representing over 40% of the total. Considering the number of deals reveals a different
story, with 52% of green bonds coming from emerging markets. China keeps the lead for EM issuance at17%, followed by Colombia at 9% and Indonesia, Lithuania, South Korea and Uruguay at 4% each.

For the period January through July 2018, two thirds of green bond issues have a tenor of 10 years or less,
7% up year-on-year. Financial corporates tend to issue shorter-dated deals. However, 2018 shows anincreased appetite for medium-term debt, with 41% of issues having tenors between 5 and 10 years
compared to just 19% in 2017. Sovereigns mainly issue longer-dated deals (10 years or above), but theirtenor profile is also diversifying, with almost 20% of bonds having a tenor of 10 years or less in 2018.

Tenor by issuer type
2018

2017

Up to 5Y

Up to 5Y

5-10Y

5-10Y

10-20Y

10-20Y>20Y>20Y

Perpetual

Perpetual

N/A*

N/A**
0102030

USD Billions

ABSDevelopment Bank
Financial corporate
Government-backed entity
Local governmentNon-financial corporate
SovereignLoan
0102030

USD Billions*Includes Pace Funding Group’s USD50m PACE ABS for which the maturity date is not disclosed.
**Includes USD1.3bn of ABS, Chinese ABS, project finance, private placements and loans for which the maturity dates are not disclosed.

> 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.

Certified Climate Bonds
Empresa de Energía del Pacífico (COP70bn/USD24m), Colombia, issued a privately placed 12-year Certified

Climate Bond, becoming the first Colombian issuer to come to market with a Certified deal. Proceeds will finance theconstruction of 4 solar power plants across Colombia, located in Yumbo, Bolívar, Chicamocha and Valledupar. The
total estimated capacity of the projects is around 200MW.
EY provided the Pre-Issuance Verification Report.

Faro Energy, UK, issued a Certified Climate Bond – deal size and tenor are confidential. The bond will be used

to finance distributed solar power projects in Brazil located in Rio de Janeiro, Pernambuco, Minas Gerais andTocantins Paraiba. The project’s total production is approximately 9,905 kWh/kWp/year.

Bureau Veritas provided the Pre-Issuance Verification Report.

New issuers
Advanced Soltech Sweden AB (SEK150m/USD17m) , Sweden, issued a 5-year green bond. CICERO provided theSecond Party Opinion. The deal will finance new solar power stations and/or upgrades and expansions of existing
solar projects owned and managed by Soltech’s Chinese subsidiary Advanced SolTech Renewable Energy Hangzhou
Co. Ltd. To be eligible, solar power stations must be installed on existing buildings in areas with poor air quality due
to high levels of greenhouse gas emissions. In the SPO, CICERO notes that, although it goes beyond the requisites for
obtaining a “dark green” shade, providing quantitative metrics of what is defined as “high” GHG emissions levelswould provide additional transparency to the eligibility criteria.
Climate Bonds view: We agree.

CleanFund (USD104), USA, issued a debut C-PACE ABS, the second C-PACE securitisation deal worldwide. The PACE

Assets are secured by an initial pool of 82 PACE Assessments of commercial properties in California (45), Connecticut(31), Missouri (3), Colorado (1), Ohio (1) and Texas (1). The PACE Assets have a weighted-average (WA) annualinterest rate of 6.19% and a WA original term of 22.9 years. The presale report includes a description of the top 5
largest Assessments.
Climate Bonds view: Globally, this is the second C-PACE ABS after Greenworks Lending’s private placement in 2017.
Going forward, we would like to see more disclosure relative to the whole pool of assets.

Hang Lung Properties Limited (CNY1bn/USD150m), China, issued a 3-year green bond, which benefits from a

Lianhe Equator Second Party Opinion (not publicly available). Proceeds will be used to finance two of the firm’sconstruction projects, namely Heartland 66 and Spring City 66. Both buildings have obtained a LEED Gold precertification and a Green Building Label of two-star or above, which is in line with China’s Green Bond Support
Project Catalogue (2015 edition). The issuer estimated detailed environmental impacts, such as reductions in CO2,SO2 and NOx emissions, as well as water usage savings.
Climate Bonds view: It’s good to see that both proposed construction projects have obtained green building
certifications. This issuance generates multiple environmental benefits through energy efficiency and reduced waterusage. We would like to see more transparency related to the monitoring of proceed allocations and reporting
system.

Korean Hydro & Nuclear Power (USD600m), South Korea, issued a 5-year green bond, which benefits from a Vigeo

Eiris Second Party Opinion. Proceeds are earmarked for financing and refinancing renewable energy, clean transportand green buildings located in South Korea and overseas. Run-of-river hydropower plants and hydropower plants
with a capacity up to 20MW are eligible, as well as modernisations and upgrades of existing hydro facilities toimprove their energy performance and safety. For bioenergy, biomass will be sourced from low-grade wood fibrepellets, sawdust and other wood industry by-products. Properties are required to have obtained a LEED Gold,BREEAM Very Good or an equivalent national standard, such as the Green Standard for Energy and Environmental
Design (G-SEED).
Climate Bonds view: This is the second Korean green bond issuer to enter the market in 2018, taking the country’s
total cumulative issuance to USD3.6bn. For hydropower projects, we would like to see details on the power density
ratios and annual emissions (gCO2/kWh) of the assets.

North American Development Bank (CHF125m/USD126m) , supranational, issued an 8-year green bond, whichbenefits from a Sustainalytics Second Party Opinion. The deal will finance wind and solar projects, water &wastewater management, waste management and energy efficiency. Examples of potential eligible energy efficiency
projects are municipal and commercial buildings upgrades, industrial equipment retrofits and public lighting.
Industrial emissions reduction projects are eligible under the waste category.
Climate Bonds view: The framework does not explicitly exclude projects related to fossil fuels. Industrial equipment
retrofits and industrial emissions reductions raise a red flag as they could involve the funding of fossil fuel-basedtechnologies. We will keep monitoring the bond’s impact reporting to confirm that proceed allocations are alignedwith the Climate Bonds Taxonomy.

Repeat issuers••••••

Bancolombia: COP299bn/USD104m
CECEP Wind Power Corp: CNY700m/USD104m
Deutsche Hypo: EUR10m/USD12m
Fannie Mae: USD2bn (June)
Qingdao Rural Bank: CNY2bn/USD294m
Terna: EUR750m/USD881m

Repeat issuers account for 80% of issuance

012

QINGDAO RURAL BANK
Bancolombia
Atrium Ljungberg
Province of Québec
NRW.BANK34567

CECEP Wind-Power Corp
Terna
Asian Development Bank (ADB)
KommuneKredit
New issuers

891011USD Billions

Deutsche Hypo
Guangdong Huaxing BankLietuvos Energija
Republic of France

12July trends
July allocation of proceeds
2%5%Energy4%

Buildings

7%

33%

Transport
Water

USD11.6bn

Waste

25%

Adaptation
Industry

24%

ICT2018 monthly issuance volume
25
20

USD Billions

151050JanFebMar

CBI certifiedAprMay

CBI defined

Excluded

JunJulPending 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.
Issuer Name

Amount issued

Issue date

Taishin International Bank

TWD20m/USD0.7m

05/07/2018

Reason for exclusion/
pending
Not aligned

New York City Housing
Development CorporationKorea East West Power

US25.4m

09/08/2018

Sustainability/Social bond

USD500m

19/07/2018Sustainability/Social bondIndustrial Development
Authority of Fairfax CountyKorea Land and Housing
CorporationCitigroup

USD75m31/07/2018

Sustainability/Social bond

CHF100m/USD101m

31/07/2018

Sustainability/Social bond

ZAR140m/USD11m

12/07/2018

PendingCredit Agricole CIB

EUR2.8m/USD3.2m

11/07/2018

Pending

Credit Agricole CIB

EUR5m/USD6m

20/07/2018

Pending

Credit Agricole CIB

SEK10m/USD1m

20/07/2018

Pending

Green bonds in the market••••••

City of Toronto: closing 1 August
National Wildlife Federation: closing 1 August
Industrial Development Authority of Fairfax County: closing 1 August
San Francisco Public Utilities: closing 9 AugustSouth Carolina Jobs-Economic Development Authority
State Bank of India: Certified Climate BondInvesting News
Foresight completed the acquisition of a 2.5MW operational anaerobic digestion plant in the UK, on behalfof a pension fund.
Ontario Teacher’s Pension Fund invested CAD200m in Stem, a California based energy storage company.
Captor, a Swedish based asset manager, launched Captor Dahlia Green Bond Fund, an actively managed
fixed income fund with a focus on green bonds, as well as sustainability and social bonds.
Lead portfolio manager at NN Investment Partners, Bram Boss, states there are the first signs ofinstitutional investors showing interest in the green bond market.
Egypt approved a legal framework to issue green bonds to support the financing of renewable energy andclean transportation projects.
The UK announced a GBP343m Aerospace Sector Deal as part of the Government’s Industrial Strategy
aiming at leading the transition to a low carbon aviation industry.

Green Bond Gossip
French state-owned company Société du Grand Paris has set up a Green Euro Medium Term Note programof up to EUR5bn. Proceeds will be allocated to infrastructure and project management of the Grand Paris
Express metro system.
Nigeria plans to devise a green bond programme before the end of 2018.
The African Import-Export Bank (Afreximbank) has partnered with Aenergy to support the growth of green
infrastructure projects. The two parties will have the capacity to issue at least USD850m worth of green
bonds in the next five years.
Gussing Renewable Energy International is planning to issue its debut secured green bonds.
City of Vancouver’s Green Bond Framework received a Sustainalytics Second Party Opinion.
Moody’s assigned a Green Bond Assessment of GB1 to Monash University’s third Certified Climate Bond.

Reading and Reports
McKinsey’s published an article on “How industry can move towards a low-carbon future”.
INEP Finance Initiative published “Navigating a new climate”, the second report in a series presenting theoutputs of a collaboration between 16 of the world’s leading banks to advance recommendations of theFinancial Stability Board’s Task Force on Climate-related Financial Disclosure.
The Council on Foreign Relations published a report on “Applying Blockchain Technology to Electric Power
Systems” in part as a solution to grid complexity as a result of connecting clean energy and EV charging.
The OECD released their publication on “Energy Efficiency and Renewable Energy Financing in Ukraine”.
Rienergia has published a series of articles exploring the current and potential future role of hydropower
within the renewable energy sector, with a focus on the Italian market:••••

Tecnologia: dalle mega centrali idroelettriche al mini e micro idro
Idroelettrico, per il rilancio bisogna cambiare passo
L’idroelecttrico ai tempi dei cambiamenti climatici
Idroelettrico: regolazione e iter autorizzativi

Climate Bonds Reports
Don’t miss our China Green Bond Market Mid-Year Report 2018 – available in English and Chinese.
We recently released the second instalment in our SDG briefing series: “Why making infrastructure climateadapted and resilient will help meet the SDGs”.
“India Green Bond Market: Overview & Opportunities” is our latest country briefing analysing the progressof India’s green bond market and potential avenues for future growth.

Moving Pictures
These solar panels harness energy from rain to generate power by night.
Watch how this wind turbine creates 37 litres of drinking water a day out of thin air.
Take 0:47 mins to discover which country has become the first to divest completely from fossil fuelcompanies.
Watch how energy efficiency improvements in buildings can cut bills as well as emissions.
Take just 1 minute to discover how Norway recycles 97% of all its plastic drinks bottles.

‘Till next time,
Climate Bonds

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