EIB Increases Climate Awareness Bond (CAB) 2023 To EUR 1Bn

• EUR 400m tap creates third liquid reference on EIB’s Green Bond curve
• First semi-annual CAB Newsletter to be published tomorrow with first-ever report on allocations of individual Green Bonds to individual projects

On 1st October, the European Investment Bank (EIB), the EU Bank owned by the EU Member States, rated Aaa/AAA/AAA (Moody’s / Standard and Poor’s / Fitch), increased the 0.500% Climate Awareness Bond (CAB) 11/2023 by EUR 400m to bring the total amount outstanding to EUR 1bn.

The bond completes EIB’s EUR Green Bond curve with a third liquid reference point in an intermediate maturity and takes the total CAB issuance to EUR 10.5bn. It is EIB’s third CAB distributed in mini-benchmark / ECoop format, which foresees a size of at least EUR 500m and EUR 250m minimum re-openings upon actual demand. The EUR 3bn ECoop CAB due 11/2019 is currently the largest Green Bond outstanding, while the EUR 1.25bn CAB due 2026 is the longest outstanding Green benchmark in the market.

The transaction also draws attention to the imminent publication of EIB’s first semi-annual CAB Newsletter on October 2. The document reports, for the first time, on individual CAB allocations to individual eligible projects, completing the set of information available to investors. Transparency and accountability are a key theme of the Council Conclusions establishing the EU’s position for the UN climate conference in Paris later this year, as adopted by the EU Council on September 18.

Today’s issue and tomorrow’s newsletter reaffirm EIB’s developmental role and its commitment to spur further sustainable growth of the Green Bond market.

Like the other two EUR CABs outstanding, the new issue has been awarded a Sustainability Bond Rating of ‘b+’ from oekom, one of the leading ESG rating agencies worldwide. This is the highest rating so far assigned by this agency to any Green Bond.

Joint Bookrunners for the transaction were Credit Agricole CIB, Rabobank, SG CIB and UniCredit.

Comments on the issue:

Eila Kreivi, Director and Head of Capital Markets Department at the EIB, said: “Today’s issue and tomorrow’s new report on individual CAB-allocations to projects are contributions to the sustainable growth of the Green Bond market. They provide a clear message: EIB is determined to deliver on the commitment jointly adopted by the Multilateral Development Banks on the occasion of the UN Climate Summit in September 2014.”

Tanguy Claquin, Head of Sustainable Banking, Credit Agricole CIB, said: “The European Investment Bank demonstrates once again its commitment to the growing Green Bond market by bringing a third Climate Awareness Bond above the €1bn mark. The EIB is undoubtedly a key provider of liquidity for Green Bond funds and dedicated Green Bond portfolio.”

Hans Biemans, Head of Sustainability Markets, Rabobank, said “Rabobank is proud to be part of the Climate Awareness Bond program of EIB. EIB is creating awareness for climate change in the investor community and is setting a benchmark for transparency via great impact reporting. With an eye on the upcoming UN Climate Conference COP21 summit in Paris the EIB Climate Awareness Bond program is of great importance. Transparent, efficient and effective climate finance mechanisms and committed investors are key to combat climate change. EIB is leading the way.”

Antonio Sanfilippo, Head of Supras and Agencies Origination, SG CIB, said: “As a market leader in financing projects tackling climate change worldwide and with over EUR 19bn of its 2014 lending activity allocated to projects with an impact on climate change, EIB Climate Awareness Bonds (CAB) are attracting a clear interest from investors with a focus on green bonds. By increasing its latest Euro CAB to a benchmark size, EIB demonstrates once again its commitment to providing first class quality and liquidity to green bond investors.”

Antonio Keglevich, Head of Green Bond, UniCredit, said “It is in challenging times that we need issuers like the European Investment Bank to meet demands of a growing number of SRI investors for tradable and liquid green bonds.  With today’s increase the outstanding issues of EIB´s Climate Awareness Bond program is now well over USD 10 bn. UniCredit is happy and excited to be part in the placement of another EUR offering that has reached benchmark size joining the other two EUR denominated CAB´s due 2019 and 2026 respectively.”  

Summary Terms and Conditions for the new bond issue:

 

 

 

 

BACKGROUND INFORMATION

Renewable energy and energy efficiency – a top priority of the EU and EIB

A key instrument of EU public policy, the European Investment Bank is a market leader in the financing of projects tackling climate change worldwide. In 2014, the EIB dedicated over EUR 19bn, or 25% of its total lending activity, to climate action. Within this area, the EIB strongly supports Renewable Energy and Energy Efficiency, meaningfully contributing to the EU’s 2020 and 2030 climate policy targets. EIB’s overall lending in these areas in 2014 reached EUR 8.2bn. 

Climate Awareness Bonds

CABs, EIB Green Bonds, provide investors with the opportunity to associate their investment with EIB’s lending in the areas of renewable energy and energy efficiency, while enjoying the excellent credit quality of EIB as an issuer.

The funds raised via these issues are earmarked to match actual disbursements to eligible projects. These projects include, but are not exclusive to, respectively:

• renewable energy projects such as wind, hydropower, wave, tidal, solar and geothermal production,
• energy efficiency projects such as district heating, cogeneration, building insulation, energy loss reduction in transmission and distribution, and equipment replacement with significant energy efficiency improvements.

The support of the Green Bond market in quantity and quality is an important objective of EIB’s activity as reflected in its Corporate Operational Plan 2015-2017 (http://www.eib.org/attachments/strategies/cop2015_en.pdf, p. 15) as well as in the Climate Strategy adopted by the Bank’s Board of Directors on 22/9/2015 (http://www.eib.org/attachments/consultations/eib_climate_action_climate_strategy_20150817_en.pdf).

EIB pioneered the Green Bond segment in 2007 and is the largest issuer of Green Bonds to date, with EUR 10.5bn raised.

On 27/03/2015, in concomitance with the publication of the new version of Green Bond Principles (GBP), the EIB published its 2014 Climate Awareness Bond Newsletter:http://www.eib.org/attachments/fi/2014-cab-newsletter.pdf. The Newsletter outlines in detail EIB’s Green Bond practice in relation to the four key areas of the GBP.

The Newsletter also includes EIB’s Green Bond project impact report, the first prepared according to the proposal for a Harmonised Framework for Green Bond Impact Reporting developed jointly by the AfDB, EIB, IBRD and IFC in response to a recommendation of the 2015 Green Bond Principles:

http://www.eib.org/attachments/fi/informationonimpactreporting.pdf.

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2015, the Bank plans to borrow ca. 60bn. It raised EUR 62bn in 2014.

Background information on EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Bank’s strong credit standing is underpinned by exceptional asset quality, a strong capital base, firm shareholder support, conservative risk management and a sound funding strategy.