Market Blog #21 (26/02/19): February GB issuance at USD9bn so far: 1st GB from Telco: 1st Swedish public
transport GB issuer
Highlights:
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USD9bn green bond issued in February so far
Telefónica issues first green bond from telecommunications sector. Verizon also enters GB market
Nobina becomes first public transport company from Sweden to enter the market
Fannie Mae publishes Green MBS deals for January: USD883m
Japanese rail network operator JRTT returns to the market, set to adopt CBI Programmatic
Certification for multiple green issuance

Don’t miss:
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Only a week to go to the Climate Bonds Annual Conference! London, March 5-7. Register here.
Green Bond Pioneer Awards announced Tuesday 5th March. A big thank you to HSBC, Natixis andall our Conference Sponsors (full list here)
Hong Kong green bond market briefing
China annual green bond market report
Canada green finance market update – coming out this week
Japan green finance market report – coming out this week

Green bond deals across the globe - 20192019 Issued

501 BnUSD Bn 20.6 Bn
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536 Bn
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Total Outsanding
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Total Issued

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

1At a glance
As of 22nd February, monthly green bond issuance totalled USD9bn. 46% came from non-financial
corporates, and almost half is attributable to ICT companies: Telefónica (Spain) and Verizon (USA).
Spanish telco debut issuer Telefónica, along with repeat issuer Iberdrola, propelled Spain to the first spot
for monthly issuance to date in February, taking 23% of market share. The US and Canada are close runners
up. We’ll see how rankings change at the end of the month.
Developed markets (DM) issuance represented the vast majority of volume (82%). On the emerging
markets (EM) side, the Republic of Indonesia closed its second green sovereign sukuk of USD750m –accounting for 57% of EM issuance. The Philippines (36%), China (5%) and Iceland (2%) made up theremaining share of EM volumes.
2017

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2019

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> 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.

New issuers
Concordia University (CAD35m/USD19m), Canada, issued a 20-year green debenture, becoming the first
Canadian university to enter the green bond market. Proceeds will be earmarked to finance the new
Science Hub on the Loyola Campus. The building is expected to be 35% more efficient compared to an
average non-certified research facility and to receive a LEED Gold certification after construction.
Climate Bonds view: The issuer is a welcome addition to Canada’s pool of issuers, which has already seen
two debut and two repeat issuers closing green deals in 2019. As green bond markets develop investors are
increasingly looking for higher levels of transparency and standards. We encourage issuers to develop andpublish green bond frameworks and to seek external review.

JA Solar Japan (JPY 5.3bn/USD48m), Japan, issued a 21-year project bond, which obtained a Green 1 Green
Bond Evaluation from Japan Credit Rating Agency (JCR). Proceeds will be used for new investments related
to the construction of a solar power generation facility in Fukushima.

2Climate Bonds view: As of the end of 2018, Japan’s green bond market reached a cumulative total of
USD9.65bn with 2018’s issuance volume representing 22% growth year-on-year. This long tenor bond is
one of the first out of Japan in 2019.
Look out for a trio of Climate Bonds Japan reports and briefings launching in Tokyo later this week.
Kenedix Office Investment Corporation (JPY2bn/USD18m), Japan, issued a 5-year senior unsecured greenbond, becoming the first Japanese REIT to enter the market in 2019. The deal obtained a Sustainalytics
Second Party Opinion, as well as a Green 1 Green Bond Evaluation from JCR. The debut deal will refinancethe acquisition of two office buildings:
i)ii)

KDX Kobayashi-Doshomachi Building located in Osaka, which obtained a 3-star DBJ Green
Building certification and a Rank S CASBEE certification;
KDX Toranomon 1 chome Building located in Tokyo, which achieved a 5-star DBJ Green Building
certification and a Rank S CASBEE certification.

According to the Green Bond Framework, eligible properties must have obtained one of the following
certification levels: 3 stars or above in DBJ Green Building certification, B+ or higher rank in CASBEE for Real
Estate and 3-stars or above in BELS Certification. Buildings achieving at least 10% energy or water efficiency
improvements or other environmentally beneficial refurbishments generating at least 10% improvements
are also eligible.
Climate Bonds view: The refinanced properties achieve a good level of green building certifications, withboth certified under the highest categories of DBJ Green Building and CASBEE. However, we encourage
issuers to finance projects with at least 20% (preferably 25%) of energy / water efficiency improvements.
Nobina (SEK500m/USD54m), Sweden, issued a 5-year senior unsecured green bond, becoming the first
Swedish green bond issuer from the public transport sector to enter the market. CICERO provided theSecond Party Opinion. The deal is expected to finance electric buses and vehicles powered by biofuels –such as rapeseed oil methyl esters or hydrotreated vegetable oil – as well as charging infrastructure.
Climate Bonds view: Green bond issuance in Sweden kept a strong pace in the first two months of 2019,
totalling USD1.2bn.
NorgesGruppen (NOK400m/USD46m), Norway, issued a 5-year senior unsecured green bond – the first
Norwegian issuance of 2019. CICERO provided a Second Party Opinion on the issuer’s Green Bond
Framework. The net proceeds will be used exclusively to finance and refinance projects and assets in
Norway. The framework specifies clean transportation, green buildings and renewable energy as eligible
categories. It also allows for up to 15% of the net proceeds to support environmental investments with apositive environmental impact other than direct mitigation of climate change.
Climate Bonds view: The Nordic green bond market continues to expand, with another non-financial
corporate issuer. Interestingly, NorgesGruppen is a large food retailer. This deal demonstrates that issuinggreen bonds is not only possible but important for corporates from different sectors, and certainly so
within food retail. Investors are also keen for more issuance from the consumer/retail companies.
RCBC (Rizal Commercial Banking Corporation) (PHP15bn/USD287m), Philippines, issued a 1-year seniorunsecured green bond – the largest debut deal from a Philippine green bond issuer. Sustainalytics provided
the Second Party Opinion (not publicly available). Proceeds are expected to be allocated to renewable3

energy, buildings, transport and waste related project. To be eligible, green buildings must either meet
recognised standards, such as a minimum of 4 stars in the Philippines BERDE Green Building Rating System,
LEED Gold or above or belong to the top 15% of local low carbon buildings. Under the transport category,freight rail infrastructure is eligible only if not dedicated to the transport of fossil fuels.
Climate Bonds view: We welcome yet another green issuance from an ASEAN-based bank, confirming the
growth trend from the region.
The BERDE Green Building Rating System is new to us, so let’s put it into context. The scheme is based on a
1 to 5 star rating scheme (5 is the highest) which is calculated from 8 core areas, including energy efficiency& conversion, water efficiency and conversion, green materials and emissions. Sustainalytics notes that thescheme puts more emphasis on water savings compared to LEED, but has less stringent energy
requirements than BREEAM. Achieving best-in-class certification levels would provide a higher assurance ofthe buildings’ green credentials.
Reykjavik Energy (ISK3.5bn/USD29m), Iceland, issued a 36-year green bond, benefiting from a CICERO
Second Party Opinion. This is the third Icelandic green bond issuer to debut in the market. Proceeds will be
used to fund anticipated projects in eight eligible categories: renewable energy (25%), energy distribution
and management (25%), carbon capture and storage at its geothermal power plant (5%), sustainable land
use and environmental management (5%), clean transportation (5%), sustainable water and wastewater
management (20%), circular economy activities that lead to lower lifecycle energy and GHG use (5%), andproducts and technologies that support smart grid applications (10%).
Climate Bonds view: We are happy to see the Icelandic green bond market expanding to include thesecond government-backed entity green bond issuer. Reykjavik Energy is an example of a group with quite
ambitious environmental targets, with green bond issuance fitting well within these. Despite the focus onenergy (especially geothermal), it’s a positive that proceeds are expected to be spent in several different
areas, including wider initiatives such as circular economy activities. This suggests the issuer is thinking
about its business model holistically and plans to adjust its strategy accordingly.
Rolling Creek Utility District (USD7m), USA, issued a multi-tranche US Muni bond labelled as “Unlimited
Tax Bonds, Series 2019”, which obtained a Build America Mutual (BAM) GreenStar designation. Proceeds
are expected to be allocated to financing water and wastewater treatment projects and drainage facilities.
Climate Bonds view: The bond has not explicitly been labelled as green by the issuer, but we haveaccepted the BAM GreenStar designation as a sufficient label, as well as an assurance that the use ofproceeds aligns with the Green Bond Principles. The GreenStar designation provides a high-level assurance,
without disclosing the details of the selection process of eligible projects, management of proceeds andreporting practices. We strongly encourage issuers to make this information publicly available to comply
with best practice transparency standards.
Samhällsbyggnadsbolaget i Norden AB (SBB) (SEK500m/USD54m), Sweden, issued a 5-year seniorunsecured green bond, benefiting from a CICERO Second Party Opinion and an E2/64 Green Evaluationfrom S&P Global. Proceeds will be used to refinance a property portfolio consisting of rent regulated
residential apartment houses in Nordic countries, predominantly Sweden, built between 1900 and 1991,
and related investments.
The buildings in this ‘Green Project Portfolio’ are predominately built between 1950s and 1980s. SBB will
make various investments in energy efficiency, with the commitment to reduce the purchased amount of4

energy (kWh) per heated square meter and year by at least 30% across the portfolio. Other relevant
investments may support climate resilience or increase tenant functionalities. SBB might use othermeasures applicable, such as the installation of rooftop solar units.
Climate Bonds view: Nordic and in particular Swedish issuance continues to grow. A significant portion ofthis has been in real estate, and this bond provides another example of retro-fits on existing building stock.
Shandong Water Affairs Development Co. (CNY400m/USD59.5m), China, issued a 5-year green bond,benefiting from a Second Party Opinion (not publicly available) from Golden Credit Services. The proceeds
will be allocated to five projects: the development of a wastewater treatment plant and four integrated
water projects, which include the construction and operation of urban and rural water supply anddrainage, ecological wetland construction, river treatment, sewage treatment, sludge treatment anddisposal, water reuse, brackish water desalination, inter-regional water transfer, urban industrial watersupply and drainage, drinking water (centralized water supply), etc.
Climate Bonds view: We consider the intended use of proceeds for this issuance to be aligned with our
Taxonomy. Investments in sustainable water management and tackling water pollution are a priority area
for the Chinese government.
Stora Enso (SEK6bn/USD604m), Finland, issued a 3-tranche senior unsecured green bond (longest dated
bond: 5 years), benefiting from a Sustainalytics Second Party Opinion. Proceeds will be earmarked tofinance projects under sustainable forestry, renewable energy, water, waste, energy efficiency andrenewable / low carbon / eco-efficient product technologies and processes.
Eligible renewable energy projects include power generation from biomass and waste products, as well as
related renewable energy infrastructure. Energy efficiency projects are expected to meet a 20%
improvement threshold and cannot be related to operations running primarily on fossil fuels. In its Green
Bond Framework, Stora Enso states that “where appropriate, the use of proceeds may be used to finance
operating expenditures related to the projects (e.g. forest management, R&D) and will be tracked on a
project or portfolio basis.”
Climate Bonds view: The debut of the first Finnish forest products company in the green bond market is apromising development, given the country’s potential for financing green assets in the land use sector.
Bioenergy sources from by-products are aligned to the Climate Bonds Taxonomy.
Operating expenditures and R&D raise a red flag as they are not aligned to the Climate Bonds Taxonomy
and therefore should make up no more than 5% of the proceeds allocations to be eligible for inclusion in
the CBI Green Bond Database. As the issuer has committed to track funding going to these project types,
we will keep monitoring reporting to ensure the share doesn’t exceed the 5% threshold.
Telefónica (EUR1bn/USD1.14bn), Spain, issued a 5-year senior unsecured green bond – the first green deal
from a telco. Telefónica is expected to use the proceeds to finance and refinance, in whole or in part,
existing and future projects that promote energy efficiency and the reduction of GHG emissions within its
own operations and those of its clients.
Climate Bonds view: There has been very limited green bond issuance from the ICT sector, so it’s definitely
a step forward to see a large green bond come to market. Vodafone was the first telecoms provider torelease a green bond framework, and CBI expects issuance in the sector to increase in 2019 which will also
benefit investors looking to diversify their green and ESG based portfolios.
5Verizon Communications Inc (USD1bn), USA, issued a 10-year senior unsecured green bond, benefitingfrom a Sustainalytics Second Party Opinion. The proceeds will fund investments in renewable energy,
energy efficiency, green buildings, sustainable water management and biodiversity and conservation.
Climate Bonds view: The breadth of project categories that Verizon has listed suggests it is viewing its
activities holistically, which we see as positive. The US corporate market continues to lag in green issuancecompared to its size and significance. High profile issuance like this should be seen as a signal by others.

New issuers issued prior to February 2019Japan Housing Finance Agency (JHF) (JPY10bn/USD91m), Japan, issued a 20-year green bond in January
2019. Its bond scheme was selected as a pilot project by the Ministry of the Environment of Japan (MoEJ)
under its Pilot Project for Green Bond Issuance. The alignment of pilot projects to Japan’s Green Bond
Guidelines 2017 is checked by MoEJ and its contractors – in this case, E&E Solutions and JCR.
Eligible assets are limited to mortgages on newly constructed Flat 35S housing, which covers low-carbon
houses with primary energy consumption level 4 or higher or thermal insulation performance level 4, as
well as houses with an approved energy efficiency improvement plan, and each asset is verified by aninspection agent, certified by JHF. The pool of mortgages their debut green bond refinances wereoriginated in autumn 2018.
Climate Bonds view: JHF is a government-backed agency, which acquires mortgages from originating banks
and refinances itself in the bond market by issuing RMBS securitisations or bonds. Similar to Fannie Mae in
the US, it plays a key role in financing residential properties in Japan, and can leverage its position topromote investment in energy efficient buildings.
Its Flat 35S is a fixed-rate mortgage product, which provides financial incentives for high-quality, energysaving and earthquake-resilient housing. In addition to the green bond, JHF’s two recent RMBS deals(Series 140 and Series 141) include Flat 35S collateral, so we would hope to see more green issuance fromJHF going forward.
Insulation performance is graded from 1 to 4, where Level 4 is the best in terms of performance. Theenergy consumption level is graded from 1 to 5, where Level 5 being the best. Level 4 for energy
consumption corresponds to the current national energy efficiency standards, and Level 5 is 10% better.
Consequently, the housing financed with the green bond is among the most energy efficient in Japan,
which is aligned with the Climate Bonds Taxonomy. However, we encourage all issuers to makeinformation on the assets financed by a green bond publicly available for market transparency.
Jiangsu Guoxin Investment Group Limited (CNY1bn/USD149m), China, issued a 3-year green bond in
January 2019, benefiting from a Lvrong Green Finance Second Party Opinion (not publicly available). The
bond finances the construction of a pumped storage power station equipped with six 250,000 kW mixed-flow
reversible water pump turbine generator sets, with a total capacity of 1.5m kW. The annual power generation
capacity of the power station is 2.007bn kWh, and the annual pumping capacity is 2.676bn kWh.

Climate Bonds view: Pumped-storage hydroelectricity allows energy from intermittent sources (such as solar
and wind) and excess electricity from continuous base-load sources to be saved for periods of higher demand. The
Ministry of Land and Resources approved a total of 1.96km2 of construction land for the project, which gives a power
density of at least 756.98w/m2. The facility is contributing to a grid which has at least 20.3% share of intermittent

6renewables and since they’ve used Lvrong Green Finance conduct assessment on social and environmental risks weconsider the intended use of proceeds to be aligned with our definition of green.

Repeat issuers
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AC Energy: USD75m (tap) – Certified Climate Bond
AC Energy: USD110m – Certified Climate Bond
BBVA: EUR35m/USD40m
CGN Wind Energy: CNY1bn/USD147m - issued in January 2019
Canton of Basel Stadt: two tranches for a total of CHF200m/USD200m
CPPIB (Canada Pension Plan Investment Board): EUR1bn/USD1.1bn
Fannie Mae: USD883m issued in January 2019
Iberdrola: EUR800m/USD905m
Jernhusen AB: SEK150m/USD16m
Klovern: SEK200m/USD20m (tap); SEK400m/USD44m (tap)Los Angeles County Metropolitan Transportation Authority: USD419m – Certified Climate Bond
New York MTA: USD191m – Certified Climate Bond (Programmatic Certification process)
NIB (Nordic Investment Bank): SEK2bn/USD221m
NRW.BANK: EUR500m/USD572m
Province of Québec: CAD800m/USD606m
Republic of Indonesia: USD750m
Société du Grand Paris: EUR50m/USD44m – Certified Climate Bond (Programmatic Certification process)Solar Mosaic: two tranches for a total of USD260m
Zhejiang Deqing Rural Commercial Bank: CNY200m/USD30m - issued in January 2019
Repeat issuers account for 58% of issuance

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USD Billions

AC Energy
Province of Quebec
Iberdrola
NRW.BANKNew issuers

AC Energy
Republic of Indonesia
CPPIB
Jernhusen AB

BBVA
Klovern
Klovern
NIB

Societe du Grand Paris
Solar Mosaic
New York MTA
Canton of Basel Stadt

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 (SDGs) overall and see many links between green bond finance and specific SDGs, in particular SDGs
6,7,9,11,13 and 15, the proportion of proceeds allocated to social goals which are not also green needs tobe no more than 5% for inclusion in our database.
Examples of social goals without a clear climate angle are supporting museum visits for children or
financing social housing, but not necessarily energy efficient properties nor for such upgrades. Social
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projects with a climate angle – e.g. social housing upgrades to improve energy efficiency by 25% or more –will be treated as green bonds and analysed accordingly.
Issuer Name

Amount issued

Issue dateReason for exclusion/
pending

China Banking Corporation

USD150m

18/10/2018

Pending

KEB Hana Bank

USD300m; USD300m

30/01/2019

Sustainability/Social bondShenzhen Energy Group Co., Ltd

CNY1.5bn/USD246m

22/02/2019

Working capital

Guangzhou Metro Group Co.,
Ltd
Xinxing Ductile Iron Pipes Co.,Ltd
Huzhou Municipal Construction
Investment Group
Guangzhou Metro Group Co.,Ltd
Guodian Financing Lease Co., Ltd

CNY3bn/USD442m;
CNY1.6bn/USD236m
CNY1bn/USD147m

24/01/2019

Working capital

22/01/2019

Working capital

CNY500m/USD74m

18/01/2019

Not aligned

CNY3bn/USD443m

18/01/2019

Working capital

CNY1.6bn/USD229m

08/01/2019

Not aligned

DTE Energy

USD650m

15/02/2019

Pending

Dormitory Authority of the State
of New YorkUSD83m13/02/2019

Pending

Green bonds in the market
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Korea Western Power: CHF200m – closing February 27
Snam: EUR500m – closing February 28
Contact Energy: NZD100m, Certified Climate Bond (Programmatic Certification )– closing March 1
Oregon Wisconsin School District: USD12.3m – closing March 1
FYI Properties - closing March 5
Tokyo Tatemono - closing March 15

Investing NewsThe Kenya Capital Markets Authority (CMA) and Nairobi Securities Exchange (NSE) have launched new
Green Bond Guidelines and Listing Rules, a further step in the Green Bond Programme established in 2017,
whose partners include Central Bank of Kenya, Kenya Bankers Association, NSE, CMA, Climate Bonds
Initiative, Financial Sector Deepening Africa and Dutch Development Bank, FMO.
Spain’s Socialist government announced a EUR47bn public investment plan on Wednesday to tackle
climate change over 10 years, which would be partly financed by issuing green bonds.
Australia’s Prime Minister, Scott Morrison, announced a AUD2bn extension to the country’s Climate
Solutions Fund, aimed at ensuring Australia meets its 2030 emissions reduction target by partnering withremote Indigenous communities, small businesses and farmers.

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South Africa set to introduce a carbon tax in June starting at ZAR120 per tonne of carbon dioxide, althoughvarious free allocations reduce the effective rate to ZAR6-54/t, depending on the industry.
The strategy and governance indicators of the PRI’s climate risk indicators, based on TCFD guidelines are to
become mandatory for the organisations 1600+ signatories to report on from 2020.
Climate risk, or "natural disaster risk" in the wording of Japan's Financial Services Agency (FSA), is one ofseveral strategic priorities as it seeks to ensure the stability of the financial system.
The Church Commissioners for England and other institutional investors have welcomed a position
statement from commodities giant Glencore significantly strengthening its commitment to combat climatechange.
Members of the European Parliament are planning to add a controversial ‘non-sustainable’ category to theEU’s Taxonomy of Sustainable Economic Activities.
European Union lawmakers struck an agreement on green public procurement rules for new buses,
requiring local authorities purchase a minimum share of 24% to 45% by 2025 of clean vehicles running on
gas or electricity by 2025 and 33% to 66% by 2030, depending on a country’s population and GDP.

Green Bond Gossip
The Egyptian government aims to issue between USD250m and USD500m of debut green bonds this year.
The Kenya Electricity Generating Company (KenGen) is looking into issuing raising funds through green
bonds later this year.
Following approval of its book build by the Securities and Exchange Commission (SEC), Access Bank Plc is
set to issue the first corporate Certified Climate Bonds in Africa.
Japan Railway Construction, Transport and Technology Agency (JRTT) is returning to the market with abenchmark size offering.
Renew Power Limited is preparing the issuance of a USD denominated senior secured Certified Climate
Bonds through a Restricted Group consisting of certain subsidiaries of the company.

Readings & Reports
International targets to cut emissions and limit climate change will be missed due to rises in deforestationand delays in changing how humans use land, a new study warns.
UK steelmakers and university experts are teaming together on a seven-year research programme aimed atboosting the productivity of the steel sector by championing carbon capture techniques and minimisingindustrial waste streams.
McKinsey & Company have recently published perspective pieces on how the energy transition will unfold
and on recycling and the future of the plastics industry.
Climate Bonds reports:•••

China annual green bond market report
Hong Kong green bond market briefing
NTV Nation TV news report is here. 1m:58secs.

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Only a week to go to the Climate Bonds Annual Conference! London, March 5-7. Register here.
4th Green Bond Pioneer Awards announced Tuesday 5th March at evening event.
A big thank you to HSBC, Natixis and all our Conference Sponsors – see the full list here.
‘Till next time,
Climate Bonds

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 productis 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 not reflect the credit worthiness of the designated debt instrument, nor its compliance with national orinternational 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, basedin whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.

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