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30 July 2013
EIB launches its third SEK Climate Awareness Bond transaction of 2013
On July 30, the European Investment Bank (‘EIB’) priced a SEK 400 million tap of its SEK 750 million Climate Awareness Bond (CAB) maturing on July 24, 2020. The bond was placed with Scandinavian investors.
EIB CABs provide investors with the opportunity to channel funds into projects contributing to climate protection, while enjoying the excellent credit quality of EIB as an issuer.
The EIB is among the largest financiers of projects to tackle climate change, having provided over EUR 13bn worldwide in 2012 alone. Climate Awareness Bonds raise funds from fixed income investors to support EIB lending for renewable energy and energy efficiency.
The sole Lead Manager for the transaction was Danske Bank.
Summary Terms and Conditions for Bond Issuance:
Climate Action – a top priority of the EU and EIB
The European Union and its long-term financing institution, the EIB, have made climate change mitigation and adaptation a top policy priority. The Bank supports the EU’s goal of low-carbon and climate-resilient growth within and outside the Union. EIB’s financing activity in these sectors is the largest of all multilateral financial institutions with over EUR 13bn in climate action lending in 2012.
As laid out in the Green Paper A 2030 framework for climate and energy policies published by the European Commission in March 2013, EU’s climate and energy policy requires growing investments in renewable energy (RE) and energy efficiency (EE). The EIB has historically supported these areas with strong lending volumes – ca. EUR 30bn of loans signed since 2008.
Use of funds to support Climate Action
The funds raised via Climate Awareness Bonds are earmarked for disbursements to EIB lending projects within the fields of renewable energy and energy efficiency. These projects include, but are not exclusive to, respectively:
The earmarking will be effected by allocation of the proceeds within EIB’s Treasury, pending disbursement, to a specially created and segregated sub-portfolio invested in money market instruments. Since 2007, EIB Climate Awareness Bonds have raised EUR 2.55bn equivalent.
EIB provides transparency on the CAB disbursements to projects through the annual Corporate Responsibility report and a dedicated Climate Awareness Bond Newsletter.
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. The Bank has set a target of EUR 70bn for its 2013 funding programme, an amount similar to the volume ultimately raised in 2012 (EUR 71bn).
Background information on EIB
The 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, robust liquidity, firm shareholder support, conservative risk management and a sound funding strategy.