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Mobilizing Private Sector Financing The role of capital markets development to climate finance Green Bonds Dhaka, 12 th December 2019 Cedric Rimaud, CFA, ASEAN Program Manager Climate Bonds Initiative

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Page 1: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Mobilizing Private Sector Financing

The role of capital markets development to climate financeGreen Bonds

Dhaka, 12th December 2019Cedric Rimaud, CFA, ASEAN Program ManagerClimate Bonds Initiative

Page 2: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Green Bonds are growing fast globally

Page 3: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Green Bonds are growing fast globally

Page 4: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Standards create confidence in the market

Source: Climate Bonds Initiative

Page 5: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Green Bonds are growing fast globally

Page 6: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Asia-Pacific needs to scale up its access to capital

Bank Lending is limited in scale• Large Green projects are too big for local banks• Longer tenor loans may be unavailable locally

Green Bonds are typically longer dated• Use of Proceeds are for clearly identified infrastructure• “Good” financing, as held by ‘buy and hold’ investors

Collateral for Green Bonds is climate-resilient• Banks currently hold loans that will become bad• Climate change will result in bankruptcies

Regulators can do something about it • They hold more power than government due to financial

cross-border flows

Page 7: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Capture global capital flowsGreen Bond Funds are looking to deploy capital

Page 8: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

10 steps to develop Green Finance markets

1. Establish specific regulations at the national level2. Create market standards for ESG parameters3. Focus on Green Finance policies & initiatives4. Launch additional policy initiatives5. Create Green Finance Definitions for private market6. Develop Green Bonds as a specific tool7. Collect Data and measure progress on Green impact8. Create new financial products for Green9. Assign responsibilities within government10. Measure progress on implementing the roadmap

Page 9: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

The steps to issuance

Page 10: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Example: Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

Source: Asian Development Bank

Page 11: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

Page 12: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

Source: Asian Development Bank

Page 13: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

Source: Asian Development Bank

Page 14: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

Manila: evidence of property value increases during the different phases of the MRT

Page 15: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Land Value Capture ModelHow to finance climate-resilient transport systems for Asia

“Rail + Property” model in Hong Kong

Page 16: Cedric Rimaud UNESCAP ICC Dhaka 12th Dec 2019 Rimaud...Microsoft PowerPoint - Cedric Rimaud_UNESCAP ICC Dhaka 12th Dec 2019 Author ZHasannudin Created Date 1/20/2020 10:41:24 AM

Reach Out!

Cedric RIMAUD, CFAClimate Bonds Initiative

ASEAN Program Manager

[email protected]