Market Blog #22 25/3/19: Feb GB issuance USD13.8bn: 1st Finnish bank into market:
Moving pictures from Climate Bonds Conf & more
Highlights:••••

February issuance reaches USD13.8bn, a 40% year-on-year growth
OP Corporate Bank is first from Finland to enter GB market
Dutch company LeasePlan enters GB market with benchmark issuance for EVs
Repeat deals from QTC, Renew Power and SGP under Programmatic Certification

Don’t miss:
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The first Green Bonds State of the Market report
The second review of Post-issuance reporting in the green bond market
The first Japan green finance state of the market 2018
The annual updates for China and Canada
UBank Australia targets millennials with green term deposit Certified under the Climate Bonds Standard
Interviews from CBI Conference 2019: Kazakhstan, Australia, ADB and more

Green bond deals across the globe - 20192019 Issued

516 Bn38.6 Bn

USD Bn
0

100

200

300

554 Bn
400

500

600

Total Outsanding
Total Issued

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

1At a glance

USD Billions

Monthly green bond issuance in February reached USD13.8bn, up 40% year-on-year against 2018 figures.
2017

2018

2019

May

Jun

Jul

30
25
20
15
10
5
0
Jan

Feb

Mar

Apr

Aug

Sep

Oct

Nov

Dec

Non-financial corporates have been particularly active: nearly a third (30%) of February issuance came from them.
Telecommunications firms Telefónica (Spain) and Verizon (USA), along with Finnish debut forestry sector issuer Stora
Enso made up nearly two-thirds (63%) of non-financial corporate issuance.
On the financial corporate (bank) side, repeat issuer BNP Paribas boosted the numbers with a EUR750m bond. Debut
entrant from Finland, OP Corporate Bank, contributed with an inaugural EUR500m transaction. The two banks
accounted for nearly half (48%) of the month’s financial corporate volumes.
Sovereigns comprised the next largest issue type with 18% of February issuance. The Republic of France’s EUR1.7bn
tap of its Green OAT and Indonesia’s second sovereign green sukuk (EUR750m) were the drivers.
By comparison, the prevalent issuer types for February 2018 were ABS (28%) followed by sovereigns at 19% while
financial and non-financial corporate issuers, taken together, captured only 18% of the market.

Year-on-year comparison of issuer types for February 2017 - 2019
100%

Loan
Sovereign80%

Government-backed entity
60%

Local government
Development Bank

40%

Non-financial corporate
20%

Financial Corporate
ABS

0%
2017

2018

2019

In terms of geographical market share, the USA climbed up to the top spot with 22%, spurred by Fannie Mae’s MBS
issuance. France captured 19% of the market and came in second largely driven by the tap of the sovereign green
bond. Canada took third place with a 17% share. Spain was the only other country whose issuance exceeded
USD2bn, and this placed it fourth in the monthly rankings with a 14% market share. The like-for-like comparison for
February 2018 shows the USA at 36%, followed by Poland (18%), Canada (12%) and Germany (9%).

2Country ranking of green bond issuance for February 2018 and 2019

USD Billions

2018

2019

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

Issuance from developed markets (DM) constituted 90% of volume, up from 61% in 2018. February 2019 emerging
markets (EM) issuance was spurred by the Republic of Indonesia’s second green sukuk, which represented over halfof EM issuance, whereas in February of 2018, Poland’s second green sovereign bond made up 92% of EM issuance.

> 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
FYI Properties (USD227.8m), USA, a financing vehicle of the National Development Council for Washington State IT
facilities, issued 20-year US Muni green bond in the beginning of March. The proceeds refinanced a development in
the Washington State Capitol Campus in Olympia. The project achieved a LEED Platinum rating and comprises thedesign, construction and furnishing of a six-story office block and associated wings, a large data centre and parking
garage.
Climate Bonds view: The properties achieved a high level of green building certification, which is an obvious plus.
However, we strongly encourage issuers to set up clear tracking and reporting systems, as well as to seek external
reviews in line with market best practice.

Hitachi Capital Corporation (JPY10bn/USD89m), Japan, issued a 21-year project bond, which obtained a Green Bond
Assessment (GA1) from R&I Japan. Proceeds will be used for new investments related to the construction of a solar
power generation facility in Fukushima, Japan.
Climate Bonds view: It’s positive to see issuers disclosing the share of proceeds financing new projects versus
refinancing in pre-issuance documents. We encourage other issuers to follow suit to increase transparency ofproceed allocations.

Konan Ultra Power (JPY110m/USD1m), Japan, is a public-private sponsored regional power producer, established in
Konan City, Shiga prefecture. The company issued a 15-year deal earmarked for rooftop solar installations at twologistics facilities and LED installation at four schools, all in Konan City.
The Green Bond Assessment (GA1) provided by R&I discloses clear and detailed characteristics of the financed
projects - such as number of panels, annual power generation and number of LED lamps – as well as some expected
impact metrics, including annual CO2 emission reductions. The company is also committed to reporting on key
metrics related to use of proceeds and impact annually through its website.
Climate Bonds view: The company is a welcome addition to Japan’s pool of green bond issuers. The granularity of
information presented in the Green Bond Assessment demonstrates the issuer’s commitment to comply with bestpractice disclosure.
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LeasePlan (EUR500m/USD560m), Netherlands, issued a 30-year senior unsecured green bond in early March.
LeasePlan is Mobility- or Car-as-a-Service (“MaaS”, “Caas”) provider, and the proceeds will solely finance theacquisition of battery-powered electric vehicles (BEVs). Sustainalytics provided a Second Party Opinion for the bond.
Climate Bonds view: The benchmark issuance from LeasePlan is an encouraging development, as it indicates acommitment from the automotive industry to address climate change. The benefits in LeasePlan’s case extend totheir sharing economy-focused business model. In line with best practice, the firm has also obtained an external
review and expressed its commitment towards post-issuance reporting, including impact metrics.

OP Corporate Bank (EUR500m/USD570m), Finland, issued a five-year, benchmark-sized bond that includes a numberof eligible sectors including wind, solar, hydro, waste-to-energy, non-fossil fuel energy efficiency, green buildings,
pollution prevention, sustainable water management and low-carbon transport. “Eco-efficient and/or circular
economy adapted products, production technologies and processes” are a specific sub-category. Sustainalytics
provided a Second Party Opinion.
In its annual Green Bond Report, the issuer will include the amount of net proceeds allocated to each eligible sector,
a description of the types of businesses and projects financed, the origination timeframe and maturity profile of theloans by sector, as well as the balance of any unallocated proceeds. Indicative environmental performance indicators
have been listed in the framework.
Climate Bonds view: To date, there has been limited green bond issuance from Finland despite a healthy demand for
Nordic green debt, as evidenced by the participation of more than 100 investors in OP’s debut GB. As one of thelargest corporate lenders in the country, OP has set a precedent for other Finnish banks.
OP’s green bond framework is robust and covers a broad set of sectors. The issuer’s commitment to detailed
reporting (including several environmental impact indicators for each eligible sector) is a positive sign. We hope to
see a similar level disclosure from other Nordic issuers going forward.

Oregon School District (USD45m), USA, issued a US Muni green bond with a 20-year tenor in early March. The
District is currently designing a new elementary school to serve its growing student population. It will be the first“net zero” school constructed in the State of Wisconsin. The school will use a combination of building energy
efficiency and on-site energy generation so that over a one-year period there is no net carbon released into theatmosphere to operate the building.
Climate Bonds view: The construction of the first net zero carbon school in Wisconsin is a commendable effort, as is
the issuer’s commitment to report on the use of proceeds and environmental indicators of the bond. Obtaining
external reviews and verification to align with best practice in the market is encouraged.

Renewable Japan (JPY7.9bn/USD71m), Japan, a developer and operator of photovoltaic (PV) power plants, issued a22-year green bond. Proceeds are expected to be allocated to the construction of a PV power plant in Noboribetsu
City, on the Japanese island of Hokkaido. The status of the proceeds allocation and reduced CO2 emissions by projectwill be disclosed once a year in the issuer’s CSR report or company website.
Climate Bonds view: This is the 3rd Japanese issuer from the renewable energy sector to debut in the green bondmarket in 2019, taking this year’s pool of new entrants to five at USD318m. Don’t miss our recently published Japan
green finance state of the market 2018 report for a detailed overview of the Japanese green bond market.

New issuers issued prior to January 2019
Nanjing Pukou Construction Group Co., Ltd. (CNY1bn/USD148m), issued a green private placement bond under its
CNY2.3bn (USD340m) green PPN (private placement note) programme, registered with the National Association of
Financial Market Institutional Investors in 2018. The deal is intended to finance affordable housing, which hasreceived or is going to receive at least a 2-star certification against China’s Green Building Standards. The whole
programme will deliver quantifiable annual climate impacts.
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Climate Bonds view: This is the first green bond from China that use all proceeds for affordable housing with acertain green building certification. Despite the deal being a private placement, the issuer has disclosed details on
the use of proceeds and expected climate impact. We hope to see more private placement deals with a similarly highlevel of disclosure on the green credentials of the project(s).

Repeat issuers - February
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BNP Paribas: EUR750m/USD853m
City and County of San Francisco: USD157.3m – Certified Climate Bond
Contact Energy: NZD100m/USD67m – Certified Climate Bond (Programmatic Certification)
Iowa Finance Authority: 24 tranches for a total of USD216m
Vasakronan: SEK500m/USD53.7m
Vasakronan: SEK400m/USD43.1m
Repeat issuers account for 69% of issuance

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USD Billions

Iowa Finance Authority
Canton of Basel Stadt
BBVA
Province of Ontario
Iberdrola
NRW.BANKNew York MTACity and County of San Francisco

BNP Paribas
Republic of France
Province of Québec
Klovern
CPPIB
Jernhusen AB
Societe du Grand Paris
New issuers

Vasakronan
AC Energy
Republic of Indonesia
Solar Mosaic
Klovern
NIB
Fannie Mae

Repeat issuers – March
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Chengdu Rail Transit Group Co., Ltd: CNY3bn/USD447m
China Suntien Green Energy Company Limited: CNY910m/USD136m
Digital Realty Trust (tap): EUR225m/USD254m
DNB Boligkreditt AS: SEK5.5bn/USD590m
Duke Energy Progress LLC: USD600m
Kungsleden AB: SEK400m/USD42m
Nanjing Metro Group Co., Ltd: CNY2bn/USD298m
Queensland Treasury Corporation: AUD1.2bn/USD892m – Certified Climate Bond (Programmatic
Certification)
Renew Power: USD375m – Certified Climate Bond (Programmatic Certification)
Republic of Poland: two tranches for a total of EUR2bn/USD2.2bn
Sichuan Railway Investment: CNY1.5bn/USD224m
Société du Grand Paris (SGP): EUR2bn – Certified Climate Bond (Programmatic Certification)
Vasakronan: SEK63.3m/USD6.8m

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. Although 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 should be no more than 5% for inclusion in our database.

5Issuer Name

Amount issued

Issue date

Link Asset Management (Link
REIT)
Bank of Shangrao Co., Ltd.

HKD4bn/USD510m

08/03/2019

Reason for exclusion/
pending
Pending

CNY1.5bn/USD223m

07/03/2019

Pending

Tibet Development Investment
Group Co., Ltd.
Bank of Liuzhou Co., Ltd

CNY300m/USD45m

06/03/2019

Pending

CNY1bn /USD149m

06/03/2019

Working capital

Tus-Sound Environmental
Resources Co., Ltd.
Korea Western Power

CNY600m/USD90m

27/02/2019

Pending

CHF200/USD200m

27/02/2019

Sustainability/social bondNorth South Power Company

NGB8.5bn/USD23.6m

28/02/2019

Pending

Hyundai Capital Services

CHF200/USD200m

26/02/2019

Pending

Qingdao Conson Development(Group) Co., Ltd
China Three Gorges Corporation

CNY1.05bn/USD157m

26/02/2019

Pending

CNY500m/USD75m

26/02/2019

Working capital

China Three Gorges Corporation

CNY2.5bn/USD373m

26/02/2019

Working capitalSociedade Bioeletrica Do
MondegoSNAM

EUR50m/USD57m

25/02/2019

Pending

EUR500m/USD565m

21/02/2019

Not aligned

SFIL

EUR1bn/USD1.1bn

19/02/2019

Sustainability/social bondRegion Skåne

SEK700m/USD77m

05/02/2019

Pending

Region Skåne

SEK300m/USD33.4m

05/02/2019

Pending

Green bonds in the market
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UGE International: USD5m – multiple closings
Danske Bank: EUR500m – closed March 15
Tokyo Tatemono: JPY50bn – closed March 15
Access Bank: NGN15bn – Certified Climate Bond – closed March 18
Hayward Unified School District: USD20m – closed March 20
City of Santa Fe, New Mexico: USD14m – closed March 20
Alexandria Real Estate Equities, Inc: USD350m– closing March 21
NYSERDA: USD16m- closing March 21
Fabege AB: SEK250m – closing March 22
Baseload Capital AB Sweden: SEK500m – closing March 22
Hysan MTN Limited: HKD500m – closing March 22
New York State HFA: USD125m – Certified Climate Bond - closing March 26
Argosy Property Limited: NZD100m – closing March 27
UBank launched a consumer green deposit product targeted at millennials – Certified Climate Bond

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Investing NewsThe European Commission-mandated Technical Expert Group on Sustainable Finance (TEG) published proposals for
an EU Green Bond Standard (EU GBS). The Standard endorses regulating second opinion providers and a proposes arequirement for post-issuance impact reporting. The call for feedback will close on April 3rd, 2019.
A French-led expert group published a draft treaty for a European Finance-Climate Pact. It would establish a green
subsidiary for the European Investment Bank, which would provide concessional loans worth up to 2% of each EU
Member State’s GDP to finance climate projects.
China has published its first nationally unified guidelines on green finance, the Green Industry Guidance Catalogue.
The document outlines green definitions for six sectors and more than 200 project types that can be financed withgreen bonds. The Catalogue includes “clean coal”, which is not aligned with the Climate Bonds Taxonomy. People’s
Bank of China (PBoC) is updating its Green Bond Endorsed Project Catalogue, which will be launched in the near
future. PBoC is interested in harmonising its guidelines with international best practice.
The UK’s Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) hosted the inaugural
meeting of their new Climate Financial Risk Forum on 8 March. The committee also includes 25 financial services
companies including asset managers, banks and insurers.
According to a Bloomberg article, central banks such as the Federal Reserve maintain a cautious attitude to climatechange, viewing it as an operational rather than systemic risk.
Zurich Insurance Group collaborated with BlackRock to develop an impact measurement framework that enables
aggregating key environmental and social impact metrics across asset classes. The framework will be released for
public use to catalyse further development of impact measurement standards and metrics.
Oil company Shell set its first ever short-term emission reduction targets, pledging to reduce its net carbon footprintby 2 – 3% by 2022 compared to 2016. Top executive remuneration is tied to achieving the goal. Investors welcomed
the development with expectations rising for other fossil fuel companies to follow suit.
A group of investors with a combined $30tn (€26.6tn) in assets has demanded the steel industry update its practices
in an attempt to slow man-made climate change, which risks increasing global temperatures to dangerous levels.
The Norwegian government announced plans to divest its USD1 trillion sovereign wealth fund. If passed, thelegislative proposal would see the fund give up NOK70bn (USD8bn) worth of shares in 134 companies that are purely
focused on fossil fuel exploration and production.

Green Bond Gossip
Malaysian firm Pasukhas Green Assets (PGA) issued an ASEAN Green SRI Sukuk framework for a RM200m (USD49m)
Medium-Term Note Programme. RAM Consultancy provided a Second Party Opinion. The proceeds of the sukuk will
finance renewable energy assets in Malaysia.
Swedish home appliance manufacturer Electrolux plans to embark on a green bond programme. Funds will be spent
on reducing the environmental impacts of the company’s products and operations, including e.g. improved energy orwater efficiency at factories as well as increased use of renewable energy. CICERO has provided a Second Party
Opinion for the green bond framework.

Readings & Reports
Even if all carbon emissions were to be halted immediately, the Arctic region would still warm by more than 5C by
the century’s end, compared with the baseline average from 1986 to 2005, according to a new study from UN
Environment. (summary article)7

On a lighter note, another new UN study prepared by GRID-Arendal titled “Playing for the Planet, How Video GamesCan Deliver for People and Environment” extracts six recommendations for the video game industry, gamers andpolicymakers to provoke new thinking, new collaborations, new games and real-world impact.
While 17% of current investment by large public corporations is already green, there’s an urgent need to mobilizeeven more capital to help build a lower-carbon and more sustainable economy, according to a report by Corporate
Knights Research and the Climate Bonds Initiative. Global corporate green investment and the UN sustainable
development goals looks at how green bonds can help close the funding gap.

Climate Bonds reports:
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Green bonds: state of the market 2018
Post-Issuance Reporting In The Green Bond Market
China annual green bond market report
Hong Kong green bond market briefing
Canada green finance market update
Japan green finance market report

Moving Pictures
We got a chance to have a few words with a variety of participants from the Climate Bonds Conference earlier thismonth. Here are our few picks:•

Watch Assel Nurakhmetova, Head of Green Finance, AIFC Authority (2:33secs) who represented Astana,
Kazakhstan at the Conference•

We had David Jenkins, Head of Sustainable Finance, National Australia Bank (2:31secs) one of the first green
bond issuers out Australia•

Also, meet Carl Haarnack, Senior Portfolio Manager Fixed-Income ACTIAM (2:32secs) sharing his views on thegreen market in 2018 and discuss issues on growing the market•

Lastly, Tim Meaney, Principal Infrastructure Finance Specialist, Asian Development Bank (ADB) (3:19secs)
sharing insights about the bank’s aims of supporting climate-related development in the ASEAN region.

‘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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