Green Bond Round-up, November 14: Europe and China publish joint guide to standards

The latest green bond market developments

In a bid to created a more harmonised, investor-friendly international green bond market, a White Paper has been published comparing several green bond standards. Continuing their long-standing partnership on green finance, the European Investment Bank and the Green Finance Committee of the China Society for Finance and Banking have published the study to identify the differences between standards and find ways to improve reporting and disclosure comparability. Ma Jun, Special Advisor to the People’s Bank of China Governor and Chairman of China’s Green Finance Committee said the report was prompted by a “lack of clear definitions in some markets” and a “lack of comparability of different definitions”, saying these were “barriers to future growth of the green finance market”. PBoC Deputy Governor, Yin Yong, claims the report provides “a basis for future international cooperation on improving green finance definitions and standards with a view to facilitating cross-border green capital flows”. The research compares eligible categories under the Chinese green catalogue, the EIB’s Climate Awareness Bond programme and the principles on climate mitigation finance adopted by multilateral development banks.

Moody’s put out its latest quarterly update of the green bond market, for Q3. During the third quarter, 83 issuers sold 111 green bonds – slightly down on the second quarter. However, the average size of transactions rose from $278m in Q2 to $295m, meaning overall issuance for the period was up by half a billion dollars. Issuance for the year is expected to hit $120bn, it said.

S&P Global has released two green bond reports to mark COP23. The first concludes that 63% of existing labelled bonds (eligible under Climate Bonds Initiative’s criteria) would score the second highest score on S&P’s evaluation scale (E2). Very few score below that (E3 or E4). The reason so many deals perform so well under the evaluation framework is because they finance green energy, buildings, transport and water projects, it S&P said. Projects with a limited environmental impact, such as upgrades to fossil-fuel technologies are not included in the sample, but are eligible for assessment, the report added. Another report, on sovereign green bonds, predicts growth in the asset class, based on the oversubscription of green govvies so far, “and the premium at which those bonds have been trading on the secondary market”.


The Association of Southeast Asian Nations (ASEAN) has launched its own green bond standards to help boost regional issuance. The body – made up of ten countries including Indonesia, Malaysia, Singapore and Thailand – developed the standards (known as AGBS) on the basis of the Green Bond Principles. They were launched in Malaysia at the first ASEAN Capital Markets Forum conference. The standards will exclude all projects linked to fossil fuels. ASEAN issuance has been limited so far, dwarfed by booming green bond markets in China and India. Issuers so far include Thailand’s Bangchak Petroleum, Philippines’ AP Renewables, Singapore’s CDL and Malaysia’s Quantum Solar – the world’s first green sukuk.Bank of China plans to issue its third offshore green bond, having committed to align future issuance with the 2017 Green Bond Principles. Proceeds will finance renewables and clean transportation.Unlike its previous two offerings, this deal will be certified by the Climate Bonds Initiative and EY will do the post-issuance verification. It will be listed on the Paris Euronext Access.

The China Development Bank has issued a $500m, five-year green bond with a 2.75% coupon. According to reports, the order book hit $1.7bn from 62 accounts. 59% of the final allocation went to Asian investors, with those from Europe, Middle East and Africa taking the remaining 41%.


The City of Paris has issued its second labelled bond. Having come to market with its inaugural deal in honour of COP21 – held in the French capital in 2015 – the city sold a further €320m of notes last week. However, while its first offering was labelled green, this deal is a sustainability bond, meaning it will also finance social projects. According to reports, the 17-year notes carry a coupon of 1.428%.

The canton of Geneva has issued Switzerland’s first municipal green bond. The CHF620m deal was sold in two tranches: CHF420 of 10-year notes with a coupon of 0.25% and CHF200m of 14-year notes with a 0.5% coupon. Proceeds will finance and re-finance low-carbon hospitals and medical research sectors. Vigeo Eiris did the second-party opinion. Geneva updated its constitution to include sustainable development as “a guiding principle of public action”; it also adopted a 2030 climate plan and now issues environmental performance reports, suggesting it could be developing a clear pipeline for further green financing. The canton added that it sought “to position Geneva’s’ place as a global centre for sustainable finance” – meaning it will be in the running with London, Paris, Frankfurt, Hong Kong and Mexico, among others.

The European Company for the Financing of Railroad Rolling Stock (EUROFIMA) – a supranational created to support European rail operators in updating their rolling stock – will issue a green bond. The proceeds will finance the purchase of new rolling stock and the environmental upgrade of existing stock. Sustainalytics performed the second party review.
BNG Bank will issue its fourth sustainability bond to support its investment in ‘best in class’ sustainable municipalities in the Netherlands. Sustainalytics has provided a second-party opinion.


The much-anticipated green govvie out of Nigeria has apparently been confirmed for December. Having been pushed back a number of times already, reports in local media say the deal will now happen before the end of 2017. President Muhammadu Buhari is reported to have announced the plans while presenting the 2018 budget to Nigeria’s National Assembly. Proceeds will finance renewable energy projects, he said. If the deal does go ahead, it will be the first sovereign green bond out of Africa. There are also reports that the country plans to introduce regulation specifically for green bonds, to foster the market.