ADB To Support Climate Change Mitigation With Bonds

Asian Development Bank (ADB) has raised over €600 million in the form of an issued 7-year green bond to support climate change mitigation.

The bond has a coupon rate of 0.35% per annum and is payable annually. It has a maturity date of 16 July 2025. Furthermore, proceeds from this bond will go through ADB’s ordinary capital resources and used in its non-concessional operations.

Previously, ADB raised over $47 million from issuing offshore Indian Rupee-linked bonds to finance climate change mitigation and adaptation projects in India.

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

“We are very pleased to accommodate the strong demand for our green bonds from euro investors, which allowed us to both tighten price guidance while increasing the issue size for our first euro-denominated benchmark green bond,” said Pierre Van Peteghem, the treasurer at ADB, in a media release.

ADB’s next target for climate financing is to reach $6 billion by 2020. It plans to offer $4 billion for the climate change mitigation through support for renewable energy, energy efficiency, sustainable transport, and building smart cities. The remaining $2 billion will be dedicated towards the adaptation of a more resilient infrastructure, climate-smart agriculture, and better preparation for climate-related disasters.

 

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