ADB raises 600 million euros for climate projects

MANILA, Philippines — Manila-based Asian Development Bank (ADB) raised €600 million (around P37.6 billion) for climate financing through the issuance of a seven-year green bond.

The funds raised from the offering would be used to support low-carbon and climate resilient projects funded through ADB’s ordinary capital resources and used in its non-concessional operations.

“Since the inaugural US dollar denominated green issue in 2015, ADB has steadily expanded its green bond offerings, having pioneered the dual-tranche format for supranational green bonds in 2016 and issuing its maiden green Indian rupee-linked bond in 2017,” said ADB treasurer Pierre Van Peteghem.

“We are very pleased to accommodate the strong demand for our green bonds from euro investors,” he added.

In July 2017, ADB adopted its Climate Change Operational Framework 2017–2030 which strengthens the provision of support to its member countries in meeting their climate commitments under the Paris Agreement, the Sustainable Development Goals, and the Sendai Framework for Disaster Risk Financing.

The seven-year bonds have  a coupon rate of 0.35 percent per annum payable annually and a maturity date of July 16, 2025.

The transactions were lead-managed by Bank of America Merrill Lynch, Citi, and Credit Agricole CIB.

The issue achieved strong primary market distribution with nearly 90 percent placed in Europe, the Middle East, and Africa (EMEA); and 10 percent placed in Asia. By investor type, 39 percent of the bonds went to central banks and official institutions; 12 percent to banks; and 48 percent to fund managers, insurance, pension funds, and others.

ADB plans to raise around $23 billion from the capital markets in 2018.

The international finance institution’s  financing of climate mitigation and adaptation reached a record $4.5 billion last year, up 21 percent from the previous year.