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Green Finance News 01.03.2018

Time:2018-02-28 From: Author:

Indonesia's issuance of a green sovereign bond adds to the ongoing proliferation of green financing instruments globally; the Nordic green bond market is growing rapidly; and the Swiss exchange recently reached an agreement with the Climate Bonds Initiative about standards.

ING, a Dutch bank, and the European Investment Bank (EIB) are working together to support green investments in the European shipping market; the Ontario government issues the largest green bond in Canada; Good Energy UK is to repay its first single green bond issued in 2013.



Indonesia issues first green bond

Indonesia issued a USD $1.25 billion, five-year green sukuk on the 23rd of February. The sukuk carries an interest rate of 3.75%, below the initial guide price of 4.05%, which is in line with Islamic financial norms. Indonesia became the first Southeast Asian country to issue green sovereign bonds in international markets.

Indonesia has one of the biggest emitters of greenhouse gas emissions and hopes to encourage investors to invest in climate-friendly projects with a new focus on green finance. Last year many Southeast Asian countries were upgraded by Standard & Poor's, a rating agency, and three major Indonesian institutions received better ratings, which will reduce their financing costs in the international market.

However, the Financial Times pointed out that bond investors they still have to closely observe whether the Indonesian government has the determination to implement environmental protection policies. More than half of Indonesia's electricity production depends on coal power, making it the fifth-largest greenhouse gas emitter in the world.

Climate Action Tracker points out that Indonesia's climate policy has its own contradictions. On the one hand, it wants to increase the proportion of renewable energy, but at the same time its dependence on coal is increasing.

According to the Climate Action Tracker, one Indonesian banker said that with the issuance of green bonds in Indonesia, the government has requested its department to implement environmental assessment of all the subsidized projects of the bond.

(General: Reuters, Financial Times, Climatic Operations Tracking)


The Nordic green bond market is growing rapidly

A new report released by Handelsbanken shows that the circulation of Nordic green bonds has hit a record high and 15 new companies have entered the market. Trading between Danish energy giant Orsted and commercial banks Nordea, SEB and Swedbank boosted trading volume.

The report shows that the use of green bond proceeds is gradually diversifying. In 2017 Nordic green bond proceeds went towards renewable energy (31%), low-carbon construction (31%), low-carbon transport (13%), water and wastewater (7%), and waste management (8%).

Nordic investment bank's green bond issuance accounts for two-thirds of the total Nordic green bond issuance and the remaining one-third is the private sector. In the future, private entities, especially financial institutions, will also play a bigger role in green bond issuance.

The report predicts that investment in low-carbon buildings will continue to grow as private-sector continue to grow as there is still an increasing demand for housing, zero-emission real estate and climate prepared public infrastructure. The report also notes that there is a green bond potential in sustainable forestry. 

(Source: ftseglobalmarkets)


SWX joins Climate Bonds Initiative Partner Program

The major Swiss stock exchange, SWX, has become a partner with the Climate Bonds Initiative, working together to raise $ 100 trillion to address climate change. The SWX, together with the other world stock exchanges, is working to promote the growth of green finance and green bonds with a goal of reaching USD $1 trillion in issuance by 2020.

The Swiss exchange will work with the Climate Bonds Initiative to support increased investment in a low-carbon, climate-resilient economy. SWX will provide institutional investors, industry experts and underwriters with advice on corporate organizational structure, policy measures and market design to raise awareness of potential market opportunities.

(Source: investor ideas)



ING and EIB provide 300 million euros for green shipping

ING, a dutch bank, and the European Investment Bank (EIB) has signed an agreement to support green investments in the European shipping market with a total investment of 300 million euros. ING and EIB will each contribute 150 million euros to the facility. The agreement will ensure that green projects in the maritime sector and sponsors of sustainable projects can benefit from the terms.

This financing is available to customers with significant interests in Europe, to projects with green innovations covering the construction of new ships or the retrofitting of existing ships, as well as to inland transport and maritime operators. The agreement is part of ING's sustainable development strategy to transform society into sustainable development.

(Source: hellenicshippingnews)

 

The Ontario government issues Canada's largest green bond

The government of Ontario in Canada announced the successful issuance of a one billion U.S. dollars green bond. This is the fourth green bond issued by the Ontario government. The USD $1 billion dollar green bond is the largest in Canada's history.

In an announcement the Ontario government details how the proceeds of USD  $1 billion will be spent. About three quarter of the proceeds will go towards transportation projects. With the continued stability of the market and the interest earned on the issue of green bonds, there will be greater circulation of green bonds in the coming years.

(Source: airdberlis)


Good Energy will repay the first green bond

Good Energy announced that it will repay its first ever green bond, launched in 2013, by the end of March.

The announcement came after the company sold its Newton Downs solar farm to the community in December 2017 and has agreed to sell its facility in Brynwhilach later this year.

By buying the bond, investors backed the development of 13 solar farms in the UK and more than 150MW of renewable energy projects, providing enough clean power each year to about 37,000 households.

(Source: energylivenews)


Research news


Green investment helps avoid risks

Investing in green funds is not just good for the environment. Recent data show that this type of investment is also good for investors' profits. In the first nine days of February the S&P index fell 7.2%. According to Morningstar, two-thirds of U.S. sustainable funds were performed better than the overall market during the fall.

To be sure, investors should not draw too broad conclusions based on such a short piece of data. But Jon Hale, head of sustainability research at Morningstar, said the strong performance in the industry helps to further the idea that sustainable funds are made up of high-quality companies that perform better in turbulent markets.

According to an investment white paper many consultants avoided these funds because of limited investment opportunities and low returns.

(Source: barrons)


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Visual green gold

The rapid urbanization in Africa has generated tremendous demand for electricity, but also caused a lot of pollution and waste. In Addis Ababa, the capital of Ethiopia, the establishment of a new power plant can address both of these issues by generating one-third of the city's electricity while disposing three-fourths of municipal waste.

(Source: BBC)



New Zealand: Expanding Climate Financing

Long read: http://pureadvantage.org/news/2018/02/20/scaling-up-climate-finance/ 


Editor: Lv Jinping

Edit: Ouyang Zuoming, Meng Yue