CPPIB issues first Euro Green Bond to invest in renewables

CPPIB issues first Euro Green Bond to invest in renewables

Canada Pension Plan Investment Board (CPPIB) issued its first Euro-denominated Green Bond. The sale of €1 billion in 10-year fixed-rate notes will enable CPPIB to invest further in eligible assets such as renewables, water and real estate projects, as well as diversify the Fund’s investor base.

Among the Green Bond-eligible investments recently made by CPPIB is a joint venture in renewable power and offshore wind assets. In 2018, CPPIB acquired 49% of Enbridge’s interests in two German offshore wind projects, alongside a 49% interest in some of Enbridge’s North American onshore wind and solar assets.

"The European market for Green Bonds is robust and gaining even more traction amid changes such as the EU’s increased targets for how much of the region’s consumed energy comes from renewable sources. The capital raised will help finance our expanding portfolio of eligible green assets and demonstrate how we integrate environmental considerations into our investment decisions,"...said Poul Winslow, Senior Managing Director & Global Head of Capital Markets and Factor Investing.

This issuance follows CPPIB’s inaugural Green Bond in June 2018, the first such market offering from any pension fund. Investors bought $1.5 billion of the Canadian dollar-denominated 10-year bond.

CPPIB’s Green Bond Framework defines three categories as eligible for investment from Green Bond proceeds:

  • Renewable Energy (wind and solar);
  • Sustainable Water and Wastewater Management; and
  • Green Buildings (LEED Platinum certified).

Annual issuance of green bonds is expected to reach $250-$300 billion in 2018, and increase to $1 trillion by 2020, according to the Climate Bonds Initiative.