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Green City Bonds Coalition
Building a global bond market that will finance
development of low carbon
and climate resilient cities
Join us
Join us
$88tn assets under management $30tn Insurance
$27tn Pension funds – 19 out of 20 are public sector$6tn Sovereign wealth$25tn Fund managers, mutuals, foundations(SRI = $13tn global)50-60% bonds
Green/brown
Context: $45 trillion of “interest”U
S$2
2.5
trill
ion
US$8 trillion
US$8 trillion
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90% investment gradeRefinance as well as projects
USD$1.2bn
$11bn
$3.1bn
$36.6bn
2015
: $70
exp
ecte
d
Targ
et $
100b
nFast growth
It’s about Use of Proceeds
Transparency, independent review
Vanilla + comparable pricing
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Issuer types 2014
Any issuers can go green
Benefits• Investor
diversification • Stickiness• Longer tenors• Multi-asset for scale
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Opportunities = scale / liquidityExpert groups = science-based definitions
Renewable energyEnergy storageGeothermal
Green buildingsGreen infra
Industrial efficiencyRE supply chain
Rail, BRTsLow emission vehicles, Electric Vehicles
Clean water Storm adaptation
Waste managementMethane reduction
AgricultureSustainable forestryFood supply chain
Reference: www.ClimateBonds.net/Taxonomy
42%
15.5%
0%
7%
7%
8%
13%
% = share of assets for bonds issued this year
Bonds are about re-financing
Asset-backed Re-financing by utilities Bank securitization
Corporate
Asset-backed Re-financing by utilities Bank securitization
Corporate
Corporate
Mature assetLow risk, long-term holdings for long-term investors, 15-25 years
Public sectorPublic sector
DevelopmentHigh riskProject financeFirst 2-5 years
Equ
ity
E
quity Bank
loansBank loans
Pr
ojec
t
Proj
ect
Public sectorPublic sector
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ZAR 1.46bn/ $136mBBB South AfricaJune1.5x oversubscribed10 year
Proceeds to be used for:Renewable Energy: solar-panel power generation, water heatersOther energy: Waste-water plants modified to generate electricity, Landfill methane gas capture and energy generationTransport: 152 hybrid-fuel buses
City of Johannesburg
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Majority of green bonds had 2nd opinion in 2014
Independent review65%
EIB – KPMG audit 16%
No review19%
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Standard definitions & certification
Science Committees
Green Property, Transport, Agriculture, Water, ++80 organizations + academics
Industry Advisory CommitteesInvestors, investment banks, verifiers
$34tn Standards Board Climate Science frameworkPotsdam Institute Climate Science
+ IIASA, PBL, FEEM
Independent verifiersOekem, Bureau Veritas, TruCost
EY, KPMG, Sustainalytics, DNV-GL
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1. CoalitionWould be issuersInvestorsDevelopment & investment banks
2. Support programHow-to; workshop + seminars Peer support matchingCreditworthiness support from green and development banksAggregation of infrequent issuers
3. Demonstration issuancesUS cities / China: Beijing / EU: Stockholm, Paris, Gothenburg
4. Investor roundtables 5. Report to UN Secretary-General
at Paris COP Dec 2015
The Plan
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