Green City Bonds Coalition

Building a global bond market that will finance

development of low carbon

and climate resilient cities

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$88tn assets under management $30tn Insurance

$27tn Pension funds – 19 out of 20 are public sector$6tn Sovereign wealth$25tn Fund managers, mutuals, foundations(SRI = $13tn global)50-60% bonds

Green/brown

Context: $45 trillion of “interest”U

S$2

2.5

trill

ion

US$8 trillion

US$8 trillion

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90% investment gradeRefinance as well as projects

USD$1.2bn

$11bn

$3.1bn

$36.6bn

2015

: $70

exp

ecte

d

Targ

et $

100b

nFast growth

It’s about Use of Proceeds

Transparency, independent review

Vanilla + comparable pricing

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Issuer types 2014

Any issuers can go green

Benefits• Investor

diversification • Stickiness• Longer tenors• Multi-asset for scale

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Opportunities = scale / liquidityExpert groups = science-based definitions

Renewable energyEnergy storageGeothermal

Green buildingsGreen infra

Industrial efficiencyRE supply chain

Rail, BRTsLow emission vehicles, Electric Vehicles

Clean water Storm adaptation

Waste managementMethane reduction

AgricultureSustainable forestryFood supply chain

Reference: www.ClimateBonds.net/Taxonomy

42%

15.5%

0%

7%

7%

8%

13%

% = share of assets for bonds issued this year

Bonds are about re-financing

Asset-backed Re-financing by utilities Bank securitization

Corporate

Asset-backed Re-financing by utilities Bank securitization

Corporate

Corporate

Mature assetLow risk, long-term holdings for long-term investors, 15-25 years

Public sectorPublic sector

DevelopmentHigh riskProject financeFirst 2-5 years

Equ

ity

E

quity Bank

loansBank loans

Pr

ojec

t

Proj

ect

Public sectorPublic sector

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Types of issuers

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ZAR 1.46bn/ $136mBBB South AfricaJune1.5x oversubscribed10 year

Proceeds to be used for:Renewable Energy: solar-panel power generation, water heatersOther energy: Waste-water plants modified to generate electricity, Landfill methane gas capture and energy generationTransport: 152 hybrid-fuel buses

City of Johannesburg

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Majority of green bonds had 2nd opinion in 2014

Independent review65%

EIB – KPMG audit 16%

No review19%

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Standard definitions & certification

Science Committees

Green Property, Transport, Agriculture, Water, ++80 organizations + academics

Industry Advisory CommitteesInvestors, investment banks, verifiers

$34tn Standards Board Climate Science frameworkPotsdam Institute Climate Science

+ IIASA, PBL, FEEM

Independent verifiersOekem, Bureau Veritas, TruCost

EY, KPMG, Sustainalytics, DNV-GL

How to Issue

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1. CoalitionWould be issuersInvestorsDevelopment & investment banks

2. Support programHow-to; workshop + seminars Peer support matchingCreditworthiness support from green and development banksAggregation of infrequent issuers

3. Demonstration issuancesUS cities / China: Beijing / EU: Stockholm, Paris, Gothenburg

4. Investor roundtables 5. Report to UN Secretary-General

at Paris COP Dec 2015

The Plan

www.climatebonds.net