National Australia Bank has jumped into the booming green bond market, becoming the first Australian lender to issue a certified climate bond aimed at funding a suite of wind and solar energy projects.
The $150 million bond, issued on Friday, is certified by the Climate Bonds Standard – a standard similar to the FairTrade labeling scheme, which allows investors to easily prioritise ‘climate-smart’ investments – and marks the first time an Australian issuer has brought a green bond to the local market.
It is expected to raise a minimum of $150 million and will fund a portfolio of 17 wind and solar energy projects.
As we noted here on Wednesday, demand for investments that address climate change and clean technology has soared in the past year and fuelled the rapid growth of the green bonds market, trebling it in size in 2014 (to $34 billion so far) and heading for an expected $100 billion in 2015.
“Green and climate bonds are where the proceeds go to projects or assets important to addressing climate change,” said Sean Kidney, CEO of Climate Bonds Initiative.
“Independent certification gives confidence to investors that money is being used in the promised way.”
In the case of the NAB climate bond, Kidney says, funds are being dedicated to wind and solar energy project finance loans.
“From the investors’ point of view, these are high quality investment grade bonds, fully backed by NAB. The only difference is that the proceeds are earmarked for green investment. What’s not to like? This is an important development for investors acutely aware of the threat of climate change.”