Australian-based FlexiGroup has issued a landmark $50 million green Asset Backed Security for refinancing residential rooftop solar PV systems and storage, with certification against the international Climate Bonds Solar Standard.
National Australia Bank has acted as arranger and green bond structuring agent, with verification undertaken by Norwegian based DNV.GL.
FlexiGroup’s issuance is the first Australian green-labelled ABS, and the first Climate Bonds certified Australian ABS.
Sean Kidney, chief executive of Climate Bonds Initiative, said: “Australia already has one of the highest rates of rooftop solar density and a diverse ABS market. There is enormous potential for this this green ABS to be the first of many.”
NAB executive general manager, capital financing, Steve Lambert said: “NAB is naturally excited to leverage and extend its position as Australia’s leading debt financier of renewable energy and its securitisation capability by now arranging what is both a world first Climate Bond certified securitised Green Bond, and Australia’s first securitised Green Bond.
“This landmark transaction offers yet another option for investors and the emerging impact investment market in Australia.”
The Clean Energy Finance Corporation said it had invested $20 million in the green bond transaction.
“This transaction is a significant milestone in the development of the Australian green bond market,” CEFC chief executive Oliver Yates said. “Institutional investors who have reduced their exposure to the fossil fuel sector are looking for new investment avenues linked to clean energy. Green bonds can provide solid returns for investors wanting to contribute to positive climate change solutions. Other issuers can attract green investment support by also identifying and separating investment opportunities related to clean energy assets.”
According to the Climate Bonds Initiative, the certified green notes closed five basis points lower than non-green notes issued at the same time by FlexiGroup.
CEFC executive director, corporate and project finance, Richard Lovell said this was a good sign for the green bond market.
“Before this issue the approach of the market to most green bond transactions has been to price them in line with similar non-green bonds issued from the same issuer. We hope the pricing outcome on this transaction will encourage other issuers to include similar green tranches in their securitisations where possible, further expanding the availability of liquidity for clean energy investments.”