CEFC commits up to $75m as cornerstone investment in NAB's Australian dollar Climate Bond issue
CEFC commits up to $75m as cornerstone investment in NAB’s Australian dollar Climate Bond issue
4 December 2014
The Clean Energy Finance Corporation (CEFC) has committed to provide a cornerstone investment of up to $75 million in the inaugural issue of National Australia Bank’s Climate Bond issuance. This is an Australian first for an Australian dollar denominated and Australian asset backed bond of its kind.
The NAB Climate Bonds are senior unsecured NAB corporate bonds for financing a portfolio of renewable energy assets and facilities in Victoria, South Australia, Tasmania, Western Australia, NSW and the ACT. The CEFC’s investment will finance projects that meet the CEFC’s investment eligibility criteria.
This NAB Climate Bond will be certified in compliance with international Climate Bonds Standards, a global benchmark which assists investors identify investments which contribute to climate change solutions.
CEFC CEO Oliver Yates said the international green bond and climate bond markets were growing rapidly and providing new opportunities for investors to support the acceleration of clean energy technology uptake.
"The CEFC has committed to take a cornerstone investment position in NAB’s Climate Bond issuance to demonstrate the potential in the Australian market for mobilising capital in renewable energy through green bonds."
"Australian and global institutional investors are seeking investment products which apart from financial return also encompass environmental or societal benefits. These preferences are driving change, with institutional investors adopting mandates which support these initiatives" he said.
"The issuance of Climate Bonds in the Australian market highlights how debt markets could support growth and innovation and expand the flows of financing necessary for moving to a low carbon economy", Mr Yates added.
The NAB-issued bond follows the World Bank’s first Australian-dollar denominated green bond issuance for $300 million released in April that was placed with 15 investors including superannuation funds.
About Climate Bonds
Climate bonds, sometimes known as green bonds, are already being issued by a range of governments and multi-national banks and corporations including: the World Bank, the African Development Bank, European Investment Bank, Germany’s KfW, China Railways, Korea Export Import Bank.
The Climate Bond International Standards and Certification Scheme was launched in November 2011 by the Climate Bonds Initiative and addresses eligible investments, trace ability of funds and types of bonds eligible for certification.
The Climate Bonds Initiative shows bonds currently linked to key climate change solutions at $US 503 billion. Seventy-five per cent of climate-themed bonds have an implicit or explicit backing from a government entity, however the proportion of non-government backed bonds is growing fast.
National Australia Bank Group (the Group) is a financial services organisation with over 12,700,000 customers and 42,000 people, operating more than 1,700 stores and business banking centres globally.
Its major financial services franchises in Australia are complemented by businesses in New Zealand, Asia, the United Kingdom and the United States. Each of NAB's brands are uniquely positioned, but built on a common commitment to provide our customers with quality products and services, fair fees and charges, and relationships built on the principles of help, guidance and advice.
About the CEFC
The Clean Energy Finance Corporation (CEFC) invests using a commercial approach to overcome market barriers and mobilise investment in renewable energy, energy efficiency and low emissions technologies.
As at 30 June 2014, the CEFC has contracted investments of over $900 million in projects with a total value of over $3 billion. The CEFC invests for a positive return, with its more than 40 direct investments and 25 projects co-financed under aggregation programs expected to achieve an average financial yield of about 7 per cent.
These CEFC investments are expected to achieve abatement of 4.2 million tonnes of CO2e per annum with a positive net benefit to the taxpayer. They help to improve energy productivity for businesses across Australia, develop local industries and generate new employment opportunities.
The CEFC operates under the Clean Energy Finance Corporation Act 2012. More information is available on our website www.cleanenergyfinancecorp.com.au
Clean Energy Finance Corporation
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