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www.climatebonds.net
Green bonds: an opportunity for
Nigeria
Stakeholder Roundtable Session
Justine Leigh-Bell, Director Climate Bonds Initiative
29 September 2017
Lagos
What are Green Bonds?
Green bonds are debt securities issued by financial, non-financial or public entities
where the proceeds are used to finance 100% green projects and assets
Just like regular vanilla bonds. “green” is a bonus feature to the bond.
It’s about the projects and assets, not the issuer.
1. Proceeds go to Green2. External review/certification 3. Annual reporting
* New and/or re-financing
Issuer Benefits:
✓ Access to investors / investor
diversification
✓ Deeper engagement
✓ Marketing / brand positioning
✓ Development bank investor
and credit support
✓ Price?
www.climatebonds.net
Green bonds: a growing market 2017
$130+
www.climatebonds.net
Green bonds: Use of proceeds is diversifying
www.climatebonds.net
$93tn institutional investors AuM
- SRI = $21tn global
- $43tn at UN Climate Summit
- $20tn insurers x10 climate investments by 2020
Central banks: PBOC, BoE, various others
Investor driven
Pension $30tn
Insurance
$30tn
Sovereign
wlth $6tn
Funds
managers,
mutuals,
foundations
$27tn
www.climatebonds.net
A global phenomena
> $10bn outstanding
$1bn - 10bn outstanding
< $1bn outstanding
USA $35bn China $36bn
Supra-
nationals
= $42bn
Germany $15bn
Netherlands $14bn
France $19bn
Sweden $6bn
India $3bn
Canada $3bn
Mexico $2.6bn
Brazil $3bn
www.climatebonds.net
Axis Bank $500m, BBB-
Yes Bank, $161m, BBB-
Shanghai PD Bank $250m, AA
Ag Bank China $1bn, A
NAB $246m, Aa2
DKB $600m, AAA
ANZ $467m, AA-
ABN-AMRO $558m
HSBC $547m
Westpac $362m
Case examples
South African bonds Tech USD year % Rating Tenor
IDC Green Bond RE 580m 2012 9% AAA 14
Nedbank Green Savings RE 480m 2012 N/A BBB 5
CPV PWR Bond SPV Solar 111m 2013 11 BBB 16
Johannesburg City Mixed 136m 2014 10.18 BBB 10
www.climatebonds.net
An $895bn climate-aligned universe
$674bn unlabelled
climate-aligned bonds
$221bn labelled green
bonds
Bonds labelled
as ‘green’
financing green
assets and
projects.
Bonds issued by
entities enabling
a low carbon
economy but are
not labelled
green.
$895bn
www.climatebonds.net
Green city bonds -
“Cities today are home to about half the global population but represent almost two-thirds of global energy demand and 70% of carbon emissions from the energy sector, so they must play a leading role if COP21 commitments are to be achieved”
– Fatih Birol, Exec Director, International Energy Agency
• Over 100 cities, sub-sovereigns and municipalities have issued green
bonds
• Green city bonds have been issued by cities in all continents
• City agencies also count: municipal banks, transport authorities, water
utilities, etc.
• Huge potential for new cities to enter the market across the world
including in: China, India and Japan
Assets that qualify
www.climatebonds.net
Green Bond Principles – ICMA
Proceeds must go to green / Explain process for project selection; use 2nd party review / Track proceeds; use auditor to verify / Report each year on details
Climate Bonds Standard & Certification: incorporates GBPs into a standardized framework with green definitions
National Green Bond Guidelines: China, India, Nigeria, South Africa, Brazil
ASEAN Green Bond Framework
Moody’s/ S&P green assessment tools: quality of review & reporting
Guidelines and Reviews
www.climatebonds.net
Certification: affordable, easy
www.climatebonds.net
Verifiers around the world
StandardsBoard
Participants in the Certification process
Issuers to date
The Road Ahead…
1. Blue-chip issuance
2. Market education
3. Develop incentives
4. Aggregation vehicles
5. Grow green projects pipeline
www.climatebonds.net