Types of green bondsa
| Type | Proceeds raised by bond sale are | Debt recourse | Example |
|---|---|---|---|
| “Use of proceeds” bond | Earmarked for green projects | Recourse to the issuer: same credit rating of issuer’s other bonds applies | EIB “Climate Awareness Bond” (backed by EIB); Barclays Green Bond |
| “Use of proceeds” revenue bond or ABS | Earmarked for or refinances green projects | Revenue streams from the issuers through fees, taxes, etc. are collateral for the debt | State of Hawaii (backed by fees on state utilities’ electricity bills) |
| Project bond | Ring-fenced for specific underlying green project(s) | Recourse is only to a project’s assets and balance sheet | Invenergy Wind Farm (backed by Invenergy Campo Palomas wind farm) |
| Securitization (ABS) bond | Refinance portfolios of green projects or proceeds are earmarked for green projects | Recourse is to a group of projects that have been grouped together (e.g. solar leases or green mortgages) | Tesla Energy (backed by residential solar leases); Obvion (backed by green mortgages) |
| Covered bond | Earmarked for eligible projects included in the covered pool | Recourse to the issuer and, if the issuer is unable to repay the bond, to the covered pool | Berlin Hyp green Pfandbrief; Sparebank 1 Bolligkredit green covered bond |
| Loan | Earmarked for eligible projects or secured on eligible assets | Full recourse to the borrower(s) in the case of unsecured loans. Recourse to collateral in the case of secured loans, but may also feature limited recourse to borrower(s) | MEP Werke, Ivanhoe Cambridge and Natixis Assurances (DUO), OVG |
| Other debt instruments | Earmarked for eligible projects | Convertible Bonds or Notes, Schuldschein, Commercial Paper, Sukuk, Debentures |
| “Use of proceeds” bond | Earmarked for green projects | Recourse to the issuer: same credit rating of issuer’s other bonds applies | EIB “Climate Awareness Bond” (backed by EIB); Barclays Green Bond |
| “Use of proceeds” revenue bond or ABS | Earmarked for or refinances green projects | Revenue streams from the issuers through fees, taxes, etc. are collateral for the debt | State of Hawaii (backed by fees on state utilities’ electricity bills) |
| Project bond | Ring-fenced for specific underlying green project(s) | Recourse is only to a project’s assets and balance sheet | Invenergy Wind Farm (backed by Invenergy Campo Palomas wind farm) |
| Securitization (ABS) bond | Refinance portfolios of green projects or proceeds are earmarked for green projects | Recourse is to a group of projects that have been grouped together (e.g. solar leases or green mortgages) | Tesla Energy (backed by residential solar leases); Obvion (backed by green mortgages) |
| Covered bond | Earmarked for eligible projects included in the covered pool | Recourse to the issuer and, if the issuer is unable to repay the bond, to the covered pool | Berlin Hyp green Pfandbrief; Sparebank 1 Bolligkredit green covered bond |
| Loan | Earmarked for eligible projects or secured on eligible assets | Full recourse to the borrower(s) in the case of unsecured loans. Recourse to collateral in the case of secured loans, but may also feature limited recourse to borrower(s) | MEP Werke, Ivanhoe Cambridge and Natixis Assurances (DUO), OVG |
| Other debt instruments | Earmarked for eligible projects | Convertible Bonds or Notes, Schuldschein, Commercial Paper, Sukuk, Debentures |
Note:
www.climatebonds.net/market/explaining-green-bonds. This table lists examples of green bond issuance by supranational organizations, governments and corporations. The table also explains bond types, the use of proceeds and debt recourse associated with the issuances.
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