IFC Issued First Renminbi-Denominated Green Bonds on the London Stock Exchange to Support Climate-Friendly Investments
IFC issued a 500 million renminbi-denominated green bond (approximately $80.29 million) in June 2014 that will be used to support climate-friendly investments in emerging markets. The bond is listed on the London Stock Exchange and sets a precedent as the first green bond issued by a multilateral institution in the offshore Chinese markets. The bond saw demand from investors in Asia and Europe.
“IFC is committed to supporting the development of China’s capital markets, which are key to creating access to finance for the private sector and especially small and medium businesses. We will continue to seek opportunities to help deepen liquidity and extend the yield curve for offshore renminbi assets,” said IFC Vice President and Treasurer Jingdong Hua. “The addition of the renminbi as a new green bond currency also supports our goals to strengthen this important asset class.”
In March 2014, IFC became the first multilateral institution to list renminbi-denominated bonds on the London Stock Exchange, raising 2 billion renminbi from international investors. IFC previously pioneered the international issuance of renminbi-denominated bonds in China (Panda bonds) and Hong Kong (Dim Sum bonds). IFC was also the first to set up a program to regularly issue offshore renminbi-denominated discount notes.
IFC green bonds support projects to reduce greenhouse gas emissions—for example, by rehabilitating power plants and transmission facilities, installing solar and wind power, and providing financing for technology that helps generate and use energy more efficiently. Criteria for the use of IFC green bond proceeds are certified by Cicero, an independent research center associated with the University of Oslo.
In FY13, IFC invested a record $2.5 billion in climate-smart projects—nearly 14 percent of the institution's overall commitments for the year. About two thirds of IFC's investments in the power sector involved energy efficiency and renewable energy. By FY15, IFC expects its climate-related investments to make up 20 percent of its long-term financing, or $3 billion per year.