Major bank releases largest Australian green bond

By Annie Kane

02 March 2017

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A big four bank has become the first Australian bank to issue a public offshore green bond, which is also the largest green bond from an Australian issuer.

NAB’s public offshore green bond is certified under the Climate Bonds Standard and will also be consistent with the International Capital Market Association Green Bond Principles.

Proceeds from NAB’s €500 million ($691 million) bond will refinance investments in green technologies in the UK, Europe, Australia and the Americas, such as energy efficiency, green transport, renewable energy, low carbon and water efficiency projects.

The major bank said that there was “strong investor demand” for the bond, revealing that the investor book was “well oversubscribed".

NAB has revealed that the renewable energy assets earmarked for refinancing by this bond are expected to have an installed capacity of approximately 1.1 gigawatts in aggregate (design capacity), and are estimated to avoid around 1.69 million tonnes of greenhouse gas emissions (as measured by carbon dioxide equivalents) annually.

NAB EGM Capital Financing Steve Lambert said: “Increasingly, investors are looking for ways to generate measurable impact. NAB’s focus on shared value and impact investment means we are able to provide choice, allowing investors to invest in ways that meet their own environmental criteria.

“We also recognise the important role we play in funding projects that secure energy needs now and into the future and we take very seriously the role we play in in transitioning to a low carbon economy.

“We remain very active in the clean energy sector and since October we have committed over $1 billion in finance to renewable energy generators globally,” he said.

The public offshore green bond forms part of NAB’s commitment to undertake environmental financing activities of $18 billion by 2022.

NAB group treasurer, Shaun Dooley, said: “This green bond broadens NAB’s investor base and supports diversification of the portfolio, providing access to an EUR denominated green bond market estimated to exceed €60 billion [$82.9 billion].”