DFIs develop renewables reporting framework they say could help green bonds issuers and fund managers

One idea is to encourage issuers to follow suit.

The European Investment Bank (EIB), World Bank, International Finance Corporation (IFC) and African Development Bank (ADB) are designing a joint reporting framework for investment in renewables that they say could prove to be a useful benchmark for issuers in the further development of the green bonds market.
Speaking to Responsible Investor, Eila Kreivi, Director Head of Capital Markets Department at the EIB, the world’s largest issuer of green bonds to date, said the disclosure framework will tabulate different renewable energy projects alongside their financing structure and projected greenhouse gas emissions (GHG) reductions to give as much comparability as possible.
The EIB has issued €7.6bn of green bonds, which it calls Climate Awareness Bonds, across 10 currencies, including €4.3bn equivalent in 2014. It expects to issue more this year, although Kreivi told RI its plans are not precise at present.
Action against climate change has been given a priority for the EIB’s lending operations with an annual target of over 25% of total lending for 2014 and 2015. In 2013, it invested €19bn in climate related projects: 27% of its overall lending.Kreivi said the bank already does much of the work that the new framework will cover in its reporting to stakeholders such as the European Commission.
But she said one aim of the common format was to encourage other green bonds issuers to follow suit. One criticism of green bonds has been their ‘additionally’, i.e. how much environmental impact they are having beyond existing green projects. She said the data such as emissions reductions could also be useful for asset managers in creating investment products that target potential GHG reductions.
However she noted that comparability of GHG emissions reductions was difficult because the savings are projected (ex-ante) and depended on different baseline assumptions for the GHG reduction potential. The groups hope that the framework will be finished and agreed in time for the Annual General Meeting in March of the Green Bonds Principles, to which EIB is a signatory.
The EIB is also set to play a key role in the European Commission’s (EC) ambitious €300bn plan to kick-start the EU economy, part of which will be in renewable energy infrastructure. The “Investment Plan for Europe” outlined recently by EC President Jean-Claude Juncker includes making the EIB a ‘one-stop’ platform for a ‘European Fund for Strategic Investments’ (EFSI).