National Australia Bank’s launch of its ground-breaking climate bond has raised $300 million for renewable energy facilities – the first time an Australian issuer has brought a ‘green bond’ to the local market.
The NAB Climate Bond is also the first bank-issued bond to be certified in compliance with international Climate Bonds Standards, a benchmark to assist investors prioritise investments that finance climate change solutions.
The climate bonds – or green bonds – are senior unsecured NAB corporate bonds, with proceeds ring-fenced for financing a portfolio of renewable energy assets, including wind farms and solar energy facilities in Victoria, South Australia, Tasmania, Western Australia, NSW and the ACT.
Fourteen of these Australian facilities are operational and three are under construction. All are project finance facilities originated and serviced by NAB.
NAB Group Executive for Product & Markets, Antony Cahill, said the climate bonds placed the bank at the forefront of product innovation and environmental financing.
“This provides investors the opportunity to invest in a bond with the same features of any senior, unsecured NAB bond – but with the additional benefit of being dedicated to financing climate change solutions,” Mr Cahill said.
“This deal reinforces NAB’s position as the largest debt financier of renewable energy in Australia, provides the sector with a new funding source, and highlights our market-leading environmental solutions credentials.
“The launch also demonstrates the key role debt markets play in supporting the growth of new markets and financing a low carbon economy, and raises the profile of the green bond asset class in Australia.
“NAB has been a leading advocate for impact investment and this offering is a significant Australian-issued environmental impact investing opportunity presented to the local market.”
NAB recognises that environmental challenges such as climate change, resource scarcity and natural capital loss and degradation are challenges that affect our economy and society.
The renewable energy assets financed by the climate bond are expected to have an installed capacity of over 1.5 gigawatts of electricity in aggregate – the equivalent of an estimated 3.9 million tonnes of avoided greenhouse gas emissions.
That is enough generated power for around 730,000 average Australian households for one year.
The Climate Bond International Standards and Certification Scheme was launched in November 2011 by the Climate Bonds Initiative and addresses eligible investments, traceability of funds and types of bonds eligible for certification.
About Impact Investment
Impact investment is a developing global market, creating opportunities for investors seeking to address social or environmental challenges and generate a financial return. NAB believes it plays an integral role in building a strong economy and intends to be the leading financial institution delivering innovative impact investment opportunities for current and prospective customers. NAB is the founding partner of Impact Investing Australia and recently committed $1 million to support organisations in delivering finance solutions for important social issues.