Green Bond Round-up, October 18: Banque Populaire du Maroc, Kenya, ABN Amro, SNCF, Modern Land

The latest green bond developments

The OECD published a major report on the green bond market on Thursday, assessing the potential of both labelled and unlabeled notes. It called for policymakers to “revitalise” the securitization market, and identifying asset-backed green bonds as a key part of climate finance in coming years.

Elsewhere, the Climate Bonds Initiative has released its water standards, which will be incorporated into its Climate Bonds Standard, enabling water-focused green bonds to be certified. The standards have been developed with Ceres, CDP, the Alliance for Global Water Adaptation and the World Resources Institute, as part of a wider working group convened by the CBI. The consortium will now start work on widening the standards to cover “nature-based” water projects, rather than just water infrastructure and “built” assets.


Morocco’s Banque Populaire du Maroc is considering launching a green bond, which could become the first ever dirham-denominated issue. According to local reports, the bank’s shareholders will decide at its AGM early next month whether to issue. The notes being proposed will have a lifespan between seven and 10 years, and will total the equivalent of 2 billion dirham (€496m). If it does get approval, the deal may be issued in more than one tranche.

Kenya has also moved forward on its plans to issue a green bond, with plans to come to market early next year. “In conjunction with the Sustainable Finance Initiative, the banking industry will be partnering with the capital markets via the Nairobi Stock Exchange to develop a local and regional green bond market,” director of the Kenya Banking Association Nuru Mugambi told RI.

“The industry also would support government efforts to raise a green sovereign bond,” she added, suggesting that Kenya was in the race with Italy, France, Bangladesh and others to become the first country to issue.


ABN Amro Bank has made an interesting move to try and transfer the principles of green bonds to the loan market this week. The Dutch bank completed its first official green loan for real estate, and is now looking to roll the format out to third-party investors. It used some of the proceeds from its outstanding green bonds to offer an €80m loan to Dutch real estate developer OVG for the redevelopment of vacant real estate in the Netherlands. The buildings will have an energy efficiency rating of A, consuming at least 30% less energy than they did before redevelopment. Just like ABN Amro’s green bonds, the loan is expected to secure certification from the Climate Bonds Initiative, performed by Oekom.

“We have developed a template that’s very much in line with our green bond framework,” Joop Hessels, Head of Green Bonds at ABN Amro, told RI. “It helps the property developer understand what’s expected from a green loan, and it can also be used by a third-party investor who might want to participate in green loans in the future.”Green loans can widen the labelled climate-finance market to investors beyond conventional green bond buyers, Hessels added, saying this is key to scaling up green finance. “Typical green bond investors often need investment grade, benchmark transactions. With loans, you can finance smaller projects – between €10 million and €100 million –where many of the interesting projects sit in the real estate market. Plus, it means you don’t have to put everything on the balance sheet of an SSA [Sovereigns, Supranationals and Agencies] or bank, and the investor can invest directly in the projects. This can increase the speed of the energy transition.”

France’s government-owned rail network operator SNCF Réseau is set to come to market, as the country edges closer to issuing a sovereign green bond. RI understands that the organisation is currently roadshowing a benchmark-sized bond to finance public transport in France. Oekom has undertaken a second-party opinion, while JP Morgan, HSBC and Credit Agricole are managing the deal.


Modern Land claims to have become the first Chinese property developer to issue a green bond, after it sold $350m of three-year offshore notes this week with a coupon of 6.875%. It is the first green bond out of China to get a second-party opinion from climate-focused research house Cicero, although it has chosen not to publish the document.

The bond will be used to refinance ‘green’ residential property. Eligible projects must have a least two stars under China’s domestic energy efficiency standards (which range from one to three stars), ‘gold’ rating under the international LEED system, or an equivalent certification. They must have energy performance improvements of 15% for new buildings and 30% for retrofits financed by the proceeds. Up to 10% can be used to fund research and development around green real estate, too.

Earlier in the summer, Hong-Kong-based real estate investment trust Link REIT issued a $500m green bond. Modern Land, which has its credit rating upped from B to B+ by Fitch in August, expects to list the bond on the Singapore Stock Exchange.

China’s green bond market has boomed this year. Figures quoted from the China Securities Regulatory Commission show that green lending accounts for 9% of the borrowing of China’s 21 largest banks and financial institutions in the first half of this year – representing RMB7.26trn (€900bn). However, as the asset class grows, there are worries from outside the country that China’s green bond guidelines are too broad in their approach to eligible projects, mainly because of the inclusion of clean coal. There are also growing concerns around the transparency from Chinese green bond issuers.

“We share some of the general concerns around the lack of transparency in the domestic Chinese green bond market as a whole,” said Christa Clapp, head of climate finance at Cicero, adding that the Modern Land transaction “gives greater transparency to international investors” by securing a Cicero second-party opinion.