Saudi Arabia-based ACWA Power placed a US$814mn bond with a 22-year maturity in the international markets in May, an impressive debut following a year of planning and structuring. The transaction allowed the company so diversify its investor base and extend its maturity profile.
UAE-based lender National Bank of Abu Dhabi (NBAD) broke new ground by becoming the first MENA issuer to tap the green finance markets with a debut US$587mn 5-year green bond. The deal marked the largest size and tightest spread for an FI green issuance across the emerging market space, excluding China.
Global green bond issuance is estimated to top US$206bn in 2017, according to figures from Moody’s, but the development of the asset class in emerging markets is still being hampered by lack of incentives, standards and awareness, according to sustainable finance professionals.
TSKB set a new precedent in the Turkish capital markets in 2016 when it became the country’s first financial institution to issue a green bond. Now, with more stringent environmental regulations on the horizon, the bank is seizing on new deal opportunities and vying to become Turkey’s leading sustainable finance practitioner. We speak with Çiğdem İçel, Executive Vice President at TSKB about the bank’s inaugural green bond and the pipeline for sustainable projects in 2017.
The rapid growth of green finance has sparked interest from many audiences. The use of bonds to finance green projects have become an exciting market development, with demand from investors consistently outstripping supply. Across the globe, borrowers and investors are keen to engage in sustainable financing opportunities and we have seen increasing activities in Asia, paving the way for the markets in the Middle East to take off.
Sustainable energy and infrastructure projects across South and Central America are attracting attention from investors, but the outlook is challenged due to a lack of awareness on the ground.
Fibria, the world’s largest producer of eucalyptus pulp, got the timing just right when it priced a US$700mn senior unsecured green bond in January 2017, halving the company’s new issue premium and cementing its position as a leading sustainable finance practitioner in Brazil.
Chile has been one of the major success stories in Latin America over the past decade. As the economy slowed in the past year amid the commodities slump, the Chilean government is looking to attract local and foreign capital to finance an ambitious programme of sustainable energy projects across the country. The country is well positioned to succeed in this endeavour, analysts believe.
Few sectors are facing greater uncertainty from the election of Donald Trump as the new US president than green energy and renewables, but experts are sceptical that the self-confessed climate change denier could actually derail the global drive towards sustainability and stifle the rise of green finance, particularly across EM.
As the first green bond to be issued by a Turkish FI, Turkiye Sinai Kalkinma Bankasi’s (TSKB) US$300mn 5-year notes saw tremendous demand from accounts Europe and Asia, helping to set the benchmark for other Turkish issuers looking to raise capital for sustainable projects.
28 Jun 2017
26 Jun 2017