NIB contributes to revision of Green Bond Principles

The green bond market has been expanding over the past few years. To better serve the growing number of market participants, the Green Bond Principles (GBP) are revised annually. As a member of the GBP’s Executive Committee, NIB has taken an active role in producing the 2017 update of the Principles.

The GBP are a set of voluntary guidelines that aim to promote transparency and integrity in the green bond market. The Principles encourage, amongst other things, the disclosure of the use of proceeds from green bonds to support issuers in transitioning their business model towards greater environmental sustainability through specific projects.

The GBP are typically updated once a year in response to the development and growth of the global green bond market.

“NIB was elected a member of the GBP Executive Committee in 2016, and is committed to taking an active role in the development of the Principles”, says Jens Hellerup, Head of Funding & Investor Relations at NIB.

“As part of the Executive Committee, we have been working with other issuers, investors and banks in two working groups for ‘Green Project Eligibility’ and ‘Impact Reporting’”, says Jens Hellerup. “The updates we have made to the Principles are based on feedback collected from various market participants over the past year.”

“The objective of the Green Projects Eligibility group was to clarify the recommendations for the use of proceeds from green bonds and to further define project evaluation and selection criteria”, Jens Hellerup explains.

“This included updating the GBP categories, which indicate the most commonly used types of projects financed with green bonds.”

“The task of the Impact Reporting group was to propose impact reporting guidelines for sustainable water management and wastewater treatment projects in order to align them with the harmonised framework for impact reporting on energy efficiency and renewable energy projects.”

This is relevant for NIB. While NIB Environmental Bonds (NEB) have mainly financed projects within the renewable energy sector, wastewater treatment projects have become more and more prominent, and now represent a quarter of all projects financed by NEBs.

“It is always a rewarding experience working together with other issuers and investors towards a common goal”, says Jens Hellerup.

“The GBP help to define the key role debt markets can play in funding environmentally sustainable projects. Developing the Principles in alignment with the growing market will be an ambitious and ongoing process”, says Jens Hellerup.

The updated version of the GBP will be published at the GBP Annual Meeting in Paris on 14 June 2017.

Funding

NIB issued a EUR 500 million NIB Environmental Bond in May 2017. This was an increase of the Bank’s outstanding NEB 2024 bond, taking the outstanding to a total of EUR 1 billion. This is the largest environmental bond issued by NIB so far.

Since 2011, the Bank has issued a total of EUR 2.6 billion in environmental bonds, and expects further issuance to follow.

For more information on the NIB Environmental Bond framework, issues and projects financed, see NIB Environmental Bonds.