ADB to issue first clean energy bonds
The Asian Development Bank (ADB) plans to issue its inaugural Clean Energy Bond to support its clean energy projects in Asia and the Pacific.
The Clean Energy Bond is expected to have four tranches, one each denominated in Australian dollars and Turkish lira and two tranches in Brazilian real. It will carry tenors of between 4 and 7 years and will be issued in September. ADB will provide assistance to clean energy projects in an amount at least equal to the amount raised by the Clean Energy Bond.
The issuance, targeted at Japanese retail investors, will be arranged through HSBC Securities (Japan) Ltd. and will be distributed nationwide by more than 20 securities firms.
The planned bond issue follows the successful sale in April of ADB's inaugural Water Bond, which is supporting the ADB's work in the water sector in Asia and the Pacific.
Rapid economic expansion in the region has put immense pressure on resources and the environment. The use of coal and oil and other carbon-based fossil resources to meet the region's growing energy needs has added to the release of greenhouse gases that contribute to global climate change.
At the same time, insufficient energy investment in the region is preventing many developing countries and individuals from reaching their full potential. A quarter of the population of Asia and the Pacific - or more than 800 million people - still have no access to basic electricity services, while some 1.8 billion people continue to rely on traditional biomass fuels for cooking and heating.
'Clean energy is a crucial element in the fight against poverty in Asia and the Pacific. To put the region on a path to sustainable and inclusive economic growth, we are committed to supporting clean energy projects in the region that avoid harming people or the environment,' said ADB President Haruhiko Kuroda.
Between 2005 and 2009, ADB's total clean energy investments exceeded US$5 billion. Additionally, the ADB is targeting US$2 billion a year in clean energy investments by 2013 focusing on renewable energy projects such as biomass, wind, solar, hydro, and geothermal as well as on energy efficiency projects in industrial, commercial and residential sectors.
Through its clean energy program, ADB intends to help the region meet its energy security needs, facilitate a shift to a low-carbon economy, and ensure everyone in the region has access to energy.