The European Investment Bank (EIB) announced the issuance of a €1.5 billion Sustainability Awareness Bond (SAB), launched in conjunction with the One Planet Summit for Biodiversity in Paris. According to the EIB, demand for the bond was very strong, exceeding €22 billion, and the deal was upsized from its initial €1 billion target size, and priced at mid-swaps less 7bp, 2bp tighter than initial guidance.
Proceeds from the EIB’s SABs are allocated to supporting long-terms investment in environmental and social projects, in alignment with EU Taxonomy Regulation. To date, these have included categories such as Sustainable Use and Protection of Water and Marine Resources, Pollution Prevention and Control, Access to Water and Sanitation, Natural Disaster Risk Management, Access to Equitable and Inclusive Education, Universal Access to Affordable Health Services, and Health Emergencies Response & Preparedness Capacity. With the new issue, the EIB is adding a new category for SAB allocations, Protection and Restoration of Biodiversity and Ecosystems (EU Taxonomy objective #6).
Ambroise Fayolle, European Investment Bank Vice-President, said:
“Sustainable finance must be a pillar of the global response to the challenge of climate and environmental degradation. EIB is at the forefront, leading by example in lending and funding within the framework of ground-breaking EU legislation. Biodiversity is a core objective.”
The EIB stated that the biodiversity and ecosystem initiatives under the SAB will start with sustainable forest management and progressively extend to other relevant areas in due course, such as nature and biodiversity conservation, sustainable land use and management, sustainable agricultural practices, as well as related enabling activities, as per EU Taxonomy Regulation.
Ricardo Mourinho Félix, European Investment Bank Vice-President, said:
“EIB’s Sustainability Awareness Bonds are allocated only to environmental and social projects with substantial contribution to EU sustainability objectives. In 2018, EIB was the first issuer to align documentation with EU legislation on sustainable finance. Eligibility is now extended to Biodiversity. This is a major commitment to transparency to investors in one of the most important areas of engagement for the EU and the EIB.”
Patrick Gorm Nielsen, Portfolio Manager at PFA Asset Management, added
“We share EIB’s view that more clarity is needed in sustainable finance and appreciate its recent efforts tracking green finance in line with the EU Taxonomy Regulation. Highlighting that biodiversity is part of EIB’s endeavors in this field is very positive, and we have been happy to underline our support with a lead order.”