European Investment Bank issues $388 million green bond to support more clean energy projects in 2014
- 14 January 2014
LONDON: The European Investment Bank (EIB) has issued its first green bond of 2014; US$388 million placed with Swiss investors to support more low carbon energy projects.
The EIB's Climate Awareness Bond (CAB) was launched in 2007 in response to strong demand from asset managers, insurers and pension funds. The Bank has since issued a record number of CABs, which are supporting projects around the world that reduce greenhouse gas emissions, help adapt communities to climate change or boost renewable energy production.
Bertrand de Mazières, director general of Finance, EIB, said: “Following a record year for Climate Awareness Bond issuance, this first CAB of 2014 underscores EIB’s continued commitment to the green bond market. Since 2007, CABs have raised EUR 3.4 billion equivalent in seven currencies. Almost 50% of the issue was placed with investors committed to socially responsible investment. This is EIB’s largest CHF-denominated transaction at launch since 2009.”
Lead Managers for the US$388 million transaction were Barclays, Credit Suisse and Deutsche Bank.
Charlie Berman, Chairman of DCM EMEA, Barclays, said: “This inaugural Swiss Franc denominated Climate Awareness Bond (CAB) issue further highlights the continued growth in demand from investors for Socially Responsible instruments in their portfolios and EIB’s ability to structure and issue securities which meet the needs of investors whilst minimising its own funding costs.”
Hans-Ulrich Meister, Head Private Banking & Wealth Management and Chief Executive Officer, Region Switzerland, Credit Suisse said: “As a financial services provider, we can make a contribution toward environmental protection by offering our clients a broad range of sustainable products and services. Introducing the Climate Awareness Bonds of EIB to the Swiss Franc capital markets reinforces Credit Suisse’s commitment to sustainability and climate change.”
Denis Vucina, Head of CHF Syndicate at Deutsche Bank, said: "EIB printed its inaugural, highly successful Climate Awareness Bond in Swiss Francs. EIB is at the forefront of the development of this new approach and this transaction further validates their long-standing commitment to undertake socially responsible funding and investment projects. ”
The EIB is one of the largest financiers of climate focused projects, providing more than US$18 billion around the world in 2012 alone. The Bank's lending for renewable energy and energy efficiency in 2012 reached US$4.5 billion and 1.5 billion respectively.
A hydropower plant and dam in Costa Rica is just one such project that has benefitted from the EIB’s investment; once complete it will help Costa Rica become carbon neutral by 2021. Last week, President Hoyer of the EIB visited the plant to agree an extra US$70 million for the project.
Commenting on the Bank's US$230 million support for renewables growth in Central America last August, Mark Kenber, CEO, The Climate Group, said: "This is a prime example of collaboration between powerful institutions working on a global scale to invest in clean technology and energy efficiency, which will speed up Central America's transition to a clean revolution and keep the region competitive with other emerging economies such as Brazil and China."
By Clare Saxon