World Bank issues its 1st DKK-dominated green bond

29 / 11 / 2019

By Marwa Nassar - -

The World Bank priced a 20-year DKK 3 billion green bond – its first green bond denominated in Danish kroner. This was also the World Bank’s first issuance in DKK since 1997 and the longest maturity green bond issued by a sovereign/supranational/agency issuer in the market.

The bond carries a coupon of 0.20% per annum and matures on November 15, 2039. Skandinaviska Enskilda Banken AB (SEB) was the lead manager for the transaction.

George Richardson, Director, Capital Markets, World Bank said: “We are pleased to be back in the Danish market with our first DKK-denominated green bond. Investors are looking to connect their investments to development solutions that address climate change and other global challenges that make a difference for people around the world. We appreciate the strong support from Danish investors”.

Christopher Flensborg, Head of Climate and Sustainable Finance, SEB said: “The World Bank has over the last decade established a large number of collaborations with institutional investors to address and support the Sustainable Development Goals – and the World Bank’s Green Bond program has been a cornerstone to establish the current sustainable market platform. The challenges posed by increased pollution, climate stress, and consumption require cooperation across markets, mandates, and sectors, and this transaction is yet another example of how that can be achieved through the financial markets – now with strong support from Danish asset owners.”

The deal received strong support from institutional investors in Denmark and Sweden in including several pension funds – ATP, Danica Pension, PFA Pension, MP Pension, PenSam, AP2 – and Danske Capital.

ATP said: “As a pension fund with liabilities in Danish kroner and being a dedicated green bond investor, ATP highly appreciates the issuance of IBRD’s inaugural DKK green bond”.

PenSam said: “Investing in green bonds is a fine way to support the green transition.

PFA Pension said: “For PFA, it makes sense to invest in World Bank green bonds in order to combine a good risk adjusted return with the need to finance environmental projects, not only at home, but also in the developing part of the world.”

With this latest transaction, the World Bank has issued $ 13.7 billion equivalent in 160 green bonds in 22 currencies since its inaugural issue in 2008. World Bank Green Bonds support the financing of projects in member countries that meet specific criteria for low carbon and climate resilient growth, seeking to mitigate climate change or help affected people adapt to it. The types of eligible projects include renewable energy installations, energy efficiency projects, and new technologies in waste management and agriculture that reduce greenhouse gas emissions and help finance the transition to a low carbon economy. They also include financing for forest and watershed management and infrastructure to prevent climate-related flood damage and build climate resilience.