April 29, 2021/EBRD
By Axel Reiserer
The European Bank for Reconstruction and Development’s (EBRD) pioneering work in green transition bonds has been recognised with a 2020 Climate Bonds Award by the Climate Bonds Initiative.
“This is a public acknowledgement of all organisations and governments that are at the forefront of shifting capital towards low-carbon solutions and the larger transition to net-zero, providing real-economy examples of where investment should be going,” said Sean Kidney, CEO, Climate Bonds Initiative.
The EBRD first introduced green transition bonds in 2019 to finance resource efficiency projects in high energy-use sectors of the economy such as manufacturing. The instrument complements the existing green bond market by concentrating on resource-intensive industrial, agribusiness and construction sectors. It is especially important in the EBRD regions, which include some countries with the highest emission rates in the world.
Isabelle Laurent, EBRD Deputy Treasurer and Head of Funding, said: “We are delighted to receive the award for Transition Bond of the Year. Through the green transition bond programme that we introduced in 2019 we have been keen to highlight the importance that the EBRD places on investments in the hard-to-abate sectors that will be critical to achieving the Paris Agreement goals.”
“The development of green transition bonds should also support our clients’ path to implementing low-carbon strategies, including by establishing corporate climate governance structures, and allow them to reach a broader investor base,” added Carel Cronenberg, Head of Monitoring, Reporting and Verification in the EBRD’s Green Economy and Climate Action Department.
The proceeds of the EBRD’s green transition bonds are used to make significant improvements towards decarbonisation, reducing environmental footprints and improving resource efficiency in key enabling industries for Paris alignment. They include steel and cement production as well as chemicals and mining on which electric cars, solar panels, wind turbines and green buildings depend.
To date, the EBRD’s issuance of green bonds has totalled €7.3 billion across three green bond programmes, of which €1.1 billion has been issued in 11 green transition bond transactions.