The Asian Development Bank has raised $1.3 billion through green bond issuances, bringing it a step closer to to doubling its annual climate financing to $6 billion by 2020, up from $3 billion in 2015.
The dual-tranche three and 10-year bonds were sold to about 70 investors including Allianz Global Investors, Banque Syz & Co SA, BlackRock, California State Teachers Retirement System (CalSTRS), Calvert Investments, Compass Asset Management, Mirova, and State Street Global Advisors.
The three-year bond has an issue size of $800 million, with a coupon rate of 1 percent per annum payable semi-annually and a maturity date of 16 August 2019. Fifty-eight percent of the bonds were placed in the Americas, 37 percent in Europe, Middle East and Africa, and five percent in Asia. By investor type, 44 percent of the bonds went to fund managers. 32 percent to central banks and official institutions, 16 percent to banks and eight percent to insurance, pension and other types of investors.
The 10-year, $500 million bonds carry a coupon rate of 1.75 percent per annum payable semi-annually and will mature on 14 August 2026. Nearly half of the bonds were placed in Asia, 32 percent in Europe, Middle East and Africa, and 19 percent in the Americas. By investor type, 46 percent of the bonds went to insurance, pension and other types of investors, 30 percent to fund managers, 13 percent to banks and 11 percent to central banks and official institutions.
The proceeds of the green bonds will support low-carbon and climate-resilient projects funded through ADB’s ordinary capital resources and used in its non-concessional operations, the bank said in a statement. The bond issuance also follows the lender’s plan to double its annual climate financing to $6 billion by 2020, up from $3 billion in 2015.
“Scaling up climate financing is essential for the region to keep its commitments to the Paris Agreement, adopted at last year’s climate change summit,” said Pierre Van Peteghem, ADB’s treasurer. “Today’s green bond issue also shows ADB’s responsiveness to investors, who increasingly see the importance of green investment and sustainable development for Asia and the Pacific.”