European Investment Bank issues latest green bonds

Issue aimed at Japanese investors

The European Investment Bank, the European Union’s long-term lending institution, is issuing around €300m in green bonds for Japanese institutional and retail investors.
The EIB said the new issue of ‘Climate Awareness Bonds’ would be via two tranches denominated in Australian dollars and South African rand, with proceeds going to support renewable energy and energy efficiency projects. It has already issued some €1bn of such bonds since 2007, including a Swedish Krona-denominated issue in November 2009.
The proceeds will be ring-fenced for lending to renewable energy and energy efficiency projects. The EIB wants at least 20% of its energy projects in the EU to be in the renewable sector; last year it provided around €4bn in financing for such projects. It recently announced £450m for Vattenfall’s offshore wind farm off the UK’s South Coast and a €4.3m loan for a wind farm on Vanuatu.“I trust the Climate Awareness Bonds will be supported by a wide range of investors,” said Shigeharu Suzuki, chief executive of Daiwa Securities, which is arranging the issue. The issue follows earlier green bond issues from the World Bank and its IFC subsidiary.
Earlier this year the EIB launched its new “Earth’s Future Bonds” for the first time in Japan, targeted at individual investors.
Meanwhile, the EIB is seeking an “expression of interest” to select an urban development fund to manage £35m from the London Green Fund to invest in waste infrastructure in London. The London Green Fund is a £100m fund that will invest in climate change and is part of the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative.