IFC Launches First Green Kauri Bond in NZ Dolllars
IFC Launches First Green Kauri Bond in New Zealand Dollars to Support Climate-Smart Investments
Auckland, New Zealand, July 27, 2017—IFC, a member of the World Bank Group, today successfully launched a minimum 100 million New Zealand dollar Green Kauri bond -the equivalent of approximately $75 million – to finance private sector investments addressing climate change in emerging markets. This is the first time that a green bond has been launched in New Zealand.
IFC was one of the earliest issuers of green bonds — launching its first bond in 2008 — to help catalyze the market and unlock investment potential for private sector projects that support renewable energy and energy efficiency globally.
“This issuance demonstrates the continued and expanding role of capital markets in mobilizing international savings to help close the climate finance gap,” said IFC Director for Treasury Market Operations Monish Mahurkar. He added, “As of July 2017, IFC has issued approximately $6 billion in green bonds, including two benchmark $1 billion issuances — the largest in the market at that time.”
IFC has been a pioneer in the green bond market, issuing a 500 million offshore Renminbi-denominated green bond — the first such issuance — in London in 2014 and issuing the first green offshore Rupee-denominated bond in 2015. IFC also established in 2014 a retail bond program which focuses on providing US retail investors access to IFC green bonds.
The 10-year fixed rate bond will be issued under IFC’s Global Medium-Term Note program. IFC has issued Kauri bonds for over two decades, worth more than 5 billion New Zealand dollars, in a range of tenors — attracting both domestic and international investors. BNZ is acting as arranger and ANZ Bank and BNZ are acting as joint lead managers on the bond.
“BNZ and the whole NAB group are extremely proud to work with IFC in bringing the first green bond to the New Zealand market. This bond is a critical step in opening up green and sustainable investing opportunities in NZ dollars, and we thank IFC for its continued commitment to the New Zealand market and its development,” said BNZ Head of Debt Capital Markets, Mike Faville. “Fostering the green, social and sustainable market has been a key focus of BNZ and NAB for a long time, and it’s great to see the first issue launched. For it to be done by an issuer with the standing of IFC, with its long commitment to green bonds, makes it an even stronger way to seed the NZ market. There is a growing awareness of environmental and social issues among local investors, and we hope this transaction helps pave the way for more issuers to move along this path.”
ANZ Bank’s Head of Capital Markets New Zealand Dean Spicer added, “We are thrilled that the undeniable momentum of the green bond market has finally extended to the Kauri market. ANZ is delighted to support IFC's green bond transaction that will help further develop the Kauri market. IFC’s lead opens a new door of opportunities for both issuers and investors in NZD bonds.”
In IFC’s fiscal year 2016, the new projects financed by IFC’s green bonds contributed to approximately 1 million MWh in annual renewable energy generation, sufficient to supply electricity to approximately 74,000 US households for a year.
IFC will use the proceeds to support investments in renewable energy, energy efficiency, and other areas that reduce greenhouse emissions. The funding raised from IFC green bonds are allocated within IFC in a separate account and the inclusion criteria for eligible investments are independently verified by the Center for International Climate and Environmental Research-Oslo (CICERO).
IFC Kauri Green Bonds Terms
Finance Corporation (IFC)
Amount: Minimum 100 million New Zealand dollars
Settlement date: August 9, 2017
Maturity date: August 9, 2027
Mandated arranger: BNZ
Mandated joint lead managers: ANZ, BNZ
IFC, a member of the World Bank Group, is
the largest global development institution focused on the
private sector in emerging markets. Working with more than
2,000 businesses worldwide, we use our capital, expertise,
and influence to create markets and opportunities in the
toughest areas of the world. In FY16, we delivered a record
$19 billion in long-term financing for developing countries,
leveraging the power of the private sector to help end
poverty and boost shared prosperity. For more information,