National Australia Bank has sold $150 million worth of bonds to boost energy investment. These bonds are the first of their kind, and the proceeds from the bond issues are being used to finance local renewable energy projects. These are the first bonds to be certified in compliance with international Climate Bonds Standards, which assists investors in prioritising their investments that finance climate change solutions.
So far, 17 wind and solar projects have been financed in Victoria, South Australia, Tasmania, Western Australia, New South Wales and the ACT. Three are currently under construction. Despite the controversy since the Renewable Energy Target review this year, the global green bond market has experienced strong growth in the past couple of years. In the first half of 2014 alone, green bond issuance saw an increase of 67 percent over 2013. So far this year, green bonds have raised more than $US40 billion worldwide this year.
The bonds financing is doing good things in Australia. NAB reported that the renewable energy gains from the currently installed projects and incomplete projects are expected to have a capacity of over 1.5 gigawatts of electricity in aggregate. This amount of energy will avoid 3.9 million tonnes of greenhouse gas emissions.
And although the government continues to debate green energy’s purpose in Australia, the success of the bond reflects the intent of superannuation and institutional funds to make sure a percentage of investments are green.
While this demand is coming from investors, the potential growth of the sector is still limited by the current politic debate on renewable energy.
Information sourced from ABC Online.