EBRD’s investments in green bonds passes €1bn
Investment milestone is ‘only the beginning’ for the developmental investment bank.
The European Bank for Reconstruction and Development (EBRD) has announced that its investments in green bonds have surpassed €1bn.
The EBRD confirmed that it has reached the milestone having made its latest investment of €65m in a green covered bond from Poland’s largest bank PKO Bank Hipoteczny (PKO BH) to finance low-carbon residential buildings.
Green bond investments
Friso de Jong, principal of sustainable energy financing facilities at the EBRD, told Net Zero Investor that the organisation’s investments in green bonds have been across a wide range of sectors alongside financial institutions, including transport, logistics, manufacturing and renewable energy project developers.
Development in the green bond space has been exponential over the last five years. The EBRD made its first investment in 2017 having been among the first to issue a green bond in 2010.
Alongside the investment in PKO BH, some of the more notable investments the EBRD has made into green bonds include $100m in a certified bond issuance in favour of Norwegian renewable power producer Scatec ASA.
The bond was backed by six solar power plants owned by Scatec. This investment was the first green project bond issuance in Egypt as well as the first in the southern and eastern Mediterranean region.
De Jong told Net Zero Investor that despite the important milestone, “this is only just the beginning” for the EBRD’s investments in green bonds.
We will be supporting sustainability bonds, which allow issuers more flexibility, especially with post-Covid and the war in Ukraine, to invest in eligible social projects and assets
Non-EU countries
The EBRD was founded in 1991 and is owned by 71 countries, as well as the European Union and the European Investment Bank.
De Jong said that the EBRD was looking to widen its approach to non-EU countries as well as continuing to work “with partners, with companies, with banks to help them identify those opportunities, to help them build pipelines of eligible green projects”.
Furthermore, he said the EBRD expected to work with issuers in anticipation of the EU Green Bond Standard, a proposal that is currently going through the European Parliament’s legislative process.
“There’s still a lot to do [on green bond standards] – there are a few standards out there which we can use but are not in themselves necessarily sufficient,” de Jong explained.
Other investments the EBRD is looking to support include sustainability bonds and sustainability-linked bonds, which only started being issued in Europe last year.
“We will be supporting sustainability bonds, which allow issuers more flexibility, especially with post-Covid and the war in Ukraine, to invest in eligible social projects and assets, … something that we see will also be coming this year,” commented de Jong.
