National Australia Bank has unveiled a “climate bond” investment product, intended to raise a minimum of $150 million for Australian renewable energy facilities.
NAB states it is the first such bond to be launched on the local market and is also the first bank-issued bond to be certified in compliance with international Climate Bonds Standards.
The Climate Bond Standards certification is a screening tool that enables investors to prioritize climate and green bonds with confidence that the funds are being used to deliver climate change solutions.
The Standards were implemented to avoid a “race to the bottom” with environmental-themed bonds; where poorer quality products could dominate the sector for price or availability reasons.
The NAB climate bonds – also referred to as green bonds – are senior unsecured NAB corporate bonds.
“This deal reinforces NAB’s position as the largest debt financier of renewable energy in Australia, provides the sector with a new funding source, and highlights our market-leading environmental solutions credentials,” said NAB Group Executive for Product & Markets, Antony Cahill.
“The launch also demonstrates the key role debt markets play in supporting the growth of new markets and financing a low carbon economy, and raises the profile of the green bond asset class in Australia. NAB has been a leading advocate for impact investment and this offering is a significant Australian-issued environmental impact investing opportunity presented to the local market.”
The bond will finance renewables facilities expected to have a collective installed capacity of over 1.5 gigawatts. Combined, these facilities will generate enough electricity to power around 730,000 average Australian households and avoid the equivalent of an estimated 3.9 million tonnes of greenhouse gas emissions annually.
The assets include wind farms and solar power stations in Victoria, South Australia, Tasmania, Western Australia, NSW and the ACT. Fourteen of the facilities are already operational and three are currently under construction.
