Three New Green Bonds

by Sean Kidney

• The International Finance Corporation (IFC) is planning to issue $1bn Green Bonds per annum.
• Hawaii is setting up a bond-funded green bank
• Germany’s PNE Wind is planning a €100m corporate bond

Trade Finance magazine reports that the IFC is planning to issue $1bn a year of Green Bonds. After talking with IFC folk in Washington DC last week I think I can say that the resounding success of last month’s first $1bn IFC Green Bond is making them think much more ambitiously than before.

We think they should also be looking at stretching their balance sheet by securitizing some of their existing climate change related loans, with a small dollop of credit enhancement to get them an A rating. Result: blue chip (I mean green-chip) bonds with at last a bit of yield for suffering insurance and pension funds, and the IFC gets to more quickly recycle capital in climate investments. Watch this space.

Bloomberg’s Sally Bakewell (one of our favourite clean energy journos) reports that Germany’s PNE Wind AG (PNE3.AG) is planning to issue a €100m ($131m) corporate bond. (Given the pure-play windpower nature of PNG’s activities, that’s a Climate Bond for our purposes.)

Hawaii is pushing through legislation to set up a new “green infrastructure authority” that would make loans to consumers wanting to install solar panels on their roofs. Hawaiian consumers, who pay among the highest prices for electricity in the US, would repay the loans from the energy savings on their electrical bills. Hawaii has a goal of getting 70% of its energy needs from renewable and conservation by 2030.

Sean Kidney is Chair of the Climate Bonds Initiative, an “investor-focused” not-for-profit promoting long-term debt models to fund a rapid, global transition to a low-carbon economy.