The European Bank for Reconstruction and Development (EBRD) and Deutsche Bank have launched Environmental Sustainability Bonds to finance environmental projects in the EBRD's countries of operations.
The bond is denominated in Australian dollars and pays monthly at a fixed rate coupon of 4.80%. The new A$ 25m (EUR18.1m) issue, maturing in 2014, was launched under the EBRD’s Global Medium-Term Note Programme.
The first issue of the EBRD’s Environmental Sustainability Bonds has been arranged by Deutsche Bank, and distributed by SMBC Friend Securities Japan to Japanese retail and institutional investors.
As of October 2010, the EBRD portfolio of primary environmental investments stood at EUR1.9bn.
The proceeds of the bonds will be specifically earmarked to support a portfolio of ‘green’ projects aimed at promoting sustainable development and clean energy technologies, while improving energy efficiency, water and waste management, environmental services, and public transport, said EBRD.
As part of this ‘green’ project portfolio, the Environmental Sustainability bonds will fund the rehabilitation of municipal water infrastructure to reduce water consumption and waste water discharges; rehabilitation of power and heating plants and transmission and/or distribution facilities to reduce total greenhouse gas (GHG) emissions, by upgrading the current industrial installations.