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Green Bonds: A Guide To Funding Development Projects

July 1, 2019
A Pangea SI Expert
    What This Guide Covers:

  • How would you go about structuring a Green Bond for a developer with existing operating assets as well as development projects / projects in construction?
  • What are the funding capacities for these green bonds?
  • What are the main barriers to entry?
  • Local or Overseas?
  • Last revised: March 20, 2020

 

“When it comes to any form of development or sustainable finance, firms and individuals tend to ask the wrong questions first.”
Speak to the Sustainable Finance Specialist who wrote this guide Expert Bio Expand

Expert Bio:
With more than 16 years of experience in various positions within the financial sector, this Expert has gained strong credit expertise mainly in roles within the savings banks and cooperative banking sector. In addition, he worked for a US financial investor.

In his role as management consultant, this Expert supports banks in the development and implementation of new business models and the implementation of regulatory requirements. He is also the contact person for Sustainable Finance and Impact Banking. He is a member of the ABBL Sustainable Finance working group.

A trained banker, this Expert holds a Bachelor of Science in Management and Financial Markets, a Master of Laws in Mergers & Acquisitions, and a degree in Banking Management from a well-respected School of Finance and Management. This also includes professional aptitude in the sense of §25c Abs. 1 KWG. In addition, he teaches Business Administration at the aforementioned institution and regularly supervises final theses in the academic field as a second assessor. He is currently balancing his career with studying as a PhD student.

Simply provide your details, to get connected to this Expert.

 

 

Structuring a Green Bond for a developer with existing operating assets as well as development projects / projects in construction

The term “green bond” refers to debt securities whose proceeds are used to finance investment projects with an environmental benefit.

Identification Of Eligible Green Projects
As defined in the EU Taxonomy, COM 353 (2018)

 
The Green Bond Framework is a comprehensive document for investors and other market participants that describes the following points:

Identification Of Eligible Green Projects

Green Bonds Guide

 
Green Bonds Guide
Source: Report on EU Green Bond Standard, EU TEG (June, 2019)

Funding capacities of Green Bonds

Debt Ratio of Green Bonds

Traditional debt methods would fund at 70% debt. Can a green bond reach this level?
Funding Debt Ratio
Source: Green bonds – Mobilising the debt capital markets for a low-carbon transition (OECD, 2015).

The Main Barriers to Green Bond market development

Barriers To Entry
Source: Report on EU Green Bond Standard, EU TEG (June, 2019)

Local or Overseas?

Performance Characteristics
Questions To Screen Potential Projects
Source: Amundi Asset Management & International Finance Corporation (2018)

 
Local Versus Overseas
Source: Amundi Asset Management & International Finance Corporation (2018)

This guide was provided by a sustainable finance Expert with nearly 20 years of consulting experience.

Contact Mr Callis on 020 7551 0782 or by email mike.callis@pangea-si.com to connect with this Expert.

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