While the first half of 2019 saw a somewhat lacklustre performance in the global green bond market, the latter stages of this year are bringing change – particularly for Latin America.
Writing for the World Bank’s blog, Bruno Bastit, Associate Director, Sustainable Finance, S&P Global Ratings, notes that following the issuance of two large green transactions totalling US$1.3 billion in the first quarter of this year, the region is seeing increased interest in financing projects and infrastructure via green-labelled debt instruments.
However, for green bonds to really take hold in Latin America, uptake needs to extend beyond the handful of countries, issuers and sectors spearheading issuances today, says Bastit.
The article was published on World Bank’s blog here, as well as its Spanish language blog, Voces, here.
S&P Global Ratings has assigned Bazalgette Tunnel Ltd’s £75 million fixed-rate senior secured green note issuance a score of E1/95 under its Green Evaluation, representing the highest score on the E1-E4 scale. Proceeds from the issuance will be used to design, build and maintain the Thames Tideway Tunnel in London.
Noemie de la Gorce, the primary analyst of the Green Evaluation, commented on the “positive environmental impact from the increase of available fresh water in the tidal Thames from wastewater treatment, as well as carbon savings.”
Following Moorgate’s outreach, news of the Green Evaluation was covered by WaterBriefing and The Water Report and Global Legal Chronicle.
As the green finance market continues to expand, new sectors such as telecommunications have started to issue green bonds and capitalise on investor demand for sustainable financial instruments, according to a recent report by S&P Global Ratings.
Labeled green bond offerings to date include three significant issuances by telecom giants Telefonica, Verizon, and Vodafone. But some investors have expressed concern that green bonds issued by telecom companies fund projects that could be described as “business as usual” and that lack environmental “additionality”.
In the report, S&P attempts to gauge the environmental contribution of the bonds issued in the sector thus far, issuing these bonds a score based on public information using its Green Evaluation analytical approach.
Following outreach by Moorgate, news of the report was covered by the following specialist press: Mobile Europe, Environmental Finance and Environmental Leader.
The sustainable finance space, comprised of the green and sustainability-linked loan markets, is booming. Although the green loan market still dominates, sustainability-linked loans (SLLs) – which tie the pricing of a loan to an entity’s performance on environmental, social, and governance (ESG) criteria – are quickly catching up. Indeed, the SLL market grew nearly sevenfold to US$36.4 billion in 2018.
In a recent report, S&P Global Ratings considers the proliferation of the SLL market and the growing trend of linking ESG performance to loan margins to explicitly align pricing with achieving sustainability performance targets (SPTs), as well as the obstacles facing the SLL market; namely, transparency and disclosure.
Following outreach by Moorgate, the report was covered by Climate Change News, Banking Dive, Euractiv, and Sustainable Business News.
Earlier this year, Italy announced its plans to significantly increase renewables capacity by 2030. But what are the factors driving and impeding progress? S&P Global Ratings’ Stefania Belisario and Massimo Schiavo consider the answers for Renewable Energy World.
Italy boasts a track record of meeting renewables targets – but under different circumstances. As such, meeting the 2030 targets, though possible, is not without hurdles. Upcoming renewables auctions through 2021 are estimated at 7GW, meaning Italy may require levers beyond those scheduled to achieve their lofty ambitions.
Please click here to read the full article.
As focus on environmental, social, and governance (ESG) factors increases due to their potential impact on profit margins, Michael Ferguson, Director, Sustainable Finance at S&P Global Ratings, explores some of the most pressing risks affecting infrastructure classes, as well as the ESG opportunities that are being unearthed in the latest edition of GLIO.
“As ESG awareness and disclosure practices take root,” says Ferguson, “entities across the sector could be both better prepared for longer term, emerging ESG risks and able to anticipate strategic opportunities, rather than playing catch-up.”
To read the full article, please click here.
Writing for Renewables Investor, Timucin Engin, Senior Director, GCC Region at S&P Global Ratings, considers the growing support for sustainable finance across the Gulf Cooperation Council (GCC).
While the green bond market in the GCC is still in its infancy, Engin argues that the region’s huge investment in renewables – which serves both to alleviate the pressures of falling oil prices and further promote sustainable practices among GCC members – could spur transactions funded via green finance.
To read the article, please click here.
While ESG investing has taken time to gain a foothold in the fixed income market, ESG considerations have recently come to the fore and – according to Corinne Bendersky, Associate Director of Sustainable Finance, S&P Global Ratings – they are here to stay.
Growing recognition of the of ESG-related risks, a growing base of values-minded investors and a changing regulatory landscape have all been key drivers of the relatively recent rise of ESG-related considerations in fixed income, says Bendersky. And as further regulatory frameworks come into effect, S&P Global Ratings believes that we will see an increasing number of companies and investors seeking to meet compliance requirements and satisfy their stakeholders by incorporating ESG factors.
To read the full article, please click here (behind paywall).
In an exclusive interview with T&D India, Abhishek Dangra, Infrastructure Sector Lead, SSEA, S&P Global Ratings, considers the outlook for India’s green finance market over the coming years.
“India has pledged to have 40 per cent of installed generation capacity by 2030 to come from renewables”, explains Dangra. “As such, green financing options have begun to pique interest from the Indian market.”
This rings true of Parampujya Solar Energy, a subsidiary of Adani Green Energy Ltd., who recently proposed US$500 million in green bonds to finance and refinance its solar power plants and related transmission structure. The proposed issuance received an S&P Global Ratings’ Green Evaluation score of E1/90, the highest on a scale of E1-E4. This evaluation also marks S&P Global Ratings’ first Green Evaluation in India.
For more information on S&P Global Ratings’ Green Evaluation, please click here. To read the full interview in T&D India, please click here (p.20).
Natixis acted as Sole Structuring Bank and Sole Arranger for the first issue of asset backed securities (ABS) backed by a portfolio of renewable energy plants (REBS) sponsored by Glennmont Partners, for a total amount of EUR 51.5 million (USD 58m).
The proceeds of the issue have been applied to acquire a portfolio of project finance loan agreements disbursed to finance or refinance the construction of eight wind farms totalling 52 MW and six solar photovoltaic (PV) plants with a combined capacity of 14.4 MW.
The news was covered by reNEWS, Energy Rev, Renewables Now, PFI, Private Equity Wire, TXF, MfDowJones, Citywire, Investire, Energia & Mercato, Il Sole 24 Ore, Il Messaggero, Il Giornale.