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Climate Awareness Bonds

Climate Awareness Bonds

Climate Awareness Bonds 

Historically, generic EIB bonds have attracted demand from Socially Responsible (SR) investors. In 2007, the Bank widened its SRI appeal as the first SSA borrower to issue an environmental-themed bond - the Climate Awareness Bond (CAB). With the first CAB issue, the EIB pioneered the ring-fencing of proceeds in a dedicated liquidity portfolio. The funds are earmarked to match disbursements to EIB lending projects contributing to climate action.

More specifically, CAB-eligible projects in the fields of renewable energy and energy efficiency include, but are not exclusive to:

–    renewable energy projects such as wind, hydro, solar and geothermal energy production; and

–    energy efficiency projects such as district heating, co-generation, building insulation, energy loss reduction in transmission and distribution and equipment replacement with significant energy efficiency improvements.

CAB funds raised in the market are allocated to a specially created and segregated sub-portfolio within EIB Treasury. Pending disbursements, the sub-portfolio is invested in money market instruments.

To date (02/2016), EIB has been the largest issuer of Green Bonds with EUR 12.8bn raised across 11 currencies, of which EUR 4.0bn equivalent in 2015 alone. The EIB provides  the market with benchmark Green Bond issuances in EUR, USD and GBP, but has also issued CABs in SEK, CAD, ZAR, CHF, AUD, JPY, TRY and BRL (synthetic format). EIB is increasing liquidity, size, and scale of Green Bond issuance, in addition to gradually building green reference yield curves:

  • The EUR 3.0bn ECoop CAB due 11/2019 is currently the largest Green Bond outstanding in any currency. EIB’s EUR 1.5bn CAB due 11/2023 provides a benchmark in an intermediate maturity, while the EUR 1.5bn CAB due 11/2026 is currently the longest outstanding Green benchmark.
  • In October 2014 the EIB launched its inaugural USD Green Bond, a USD 1bn CAB in Global format, which established the first 10-year Green Bond benchmark in this currency.
  • With the GBP 1.8bn CAB due 03/2020, the EIB provides a liquid green reference point in the Sterling market.

The proceeds from EIB’s CAB issues have been disbursed in a timely manner. Since the issuance of the first Climate Awareness Bond in 2007, CAB proceeds have been allocated to 104 projects in 41 countries across the globe (as of end-June 2015).

Read more about EIB's key environmental and social policies and standards.


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