nrw.bank – green bond programme frank richter
TRANSCRIPT
NRW.BANK – Green Bond Programme
Frank Richter
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NRW.BANK – Green Bond Programme
Executive Summary
1. NRW.BANK – Sustainability
2. NRW.BANK.Green Bond 2014
Appendix
Contact
Disclaimer
Nov-14
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Executive Summary
NRW.BANK, as a state owned development bankhas a clear public mission mandate
does not focus on maximising profits
is a tax-exempt institution
is supervised by the ECB
NRW.BANK is an integrated and modern development bank
NRW.BANK is the second-largest development institution in Germany
NRW.BANK is explicitly guaranteed by the State of North Rhine-Westphalia zero risk weighting [Art 116 (4) Regulation (EU) Nr. 575/2013 (CRR)]
first-class credit quality: rating (Aa1/AA-/AAA)
for LCR status: level 1 asset [Art. 10(1) points (c) and(v) DR]
Solvency II: 0% Stressi Factor [Chapters V-VI and Art. 180(2) DR]
AQR (Stress test) passed with flying coloursCET1 ratio end of 2013: 37.28% (adverse scenario 2016: 31.47%)
Leverage ratio: 10.99%
1. NRW.BANK – Sustainability
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1. Sustainability at NRW.BANK
NRW.BANK is oriented towards the principle
of sustainability
Section 3 of the Act on NRW.BANK and
Section 5 of the Statutes of NRW.BANK
Sustainability is Corporate Responsibility
Framework: “Principles of Corporate Responsibility at NRW.BANK”
Environment
SocialEconomy
This commitment is recognized by sustainability rating agencies:
Rating positive No. 72 of 350*
* Above the peer group average
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1. Integrating Sustainability in the Bank's Processes
Transparent Reporting
Eco balance report (since 2007)
Chapter on corporate responsibility in
the financial report since 2004
Sustainability portal on the internet
since 2012
Green Bond portal on the internet
since 2013
Corporate citizenship activities report
Staff report
Development business report
Environmental report
Audit process when "launching new products"Risks from a sustainability perspective
Principles of Corporate Responsibility
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1. Sustainability at NRW.BANK – Economical Aspects
Consultancy as non-monetary output
Interest subsidy as monetary output
Promotion funds and financial resources, including non-standard maturities
Terms not in line with standard market conditions
Promotion
Themes:
Housing & Living
Infrastructure
Municipalities
Housing
Seed & Growth
Start-ups
SME‘s
Exports
Development & Protection
Environment / Climate / Energy
Education
Innovation
Fields of
Promotion:
2. NRW.BANK.Green Bond 2014
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014-2016*
EUR USD Other**
2. Funding Strategy
Green Bond (EUR)
Benchmarks (EUR and USD)
Further currency diversification
Debt Issuance Programme
Zeros
Single/Multi Callables
…
SSD/NSV
Multitranches
…
GCP Programme
Annual Funding Volume by Currency
* expected** CHF, GBP, YEN, CAD, NZD, NOK, TRY, HKD, AUD, ISK, DKK, SEK, HUF, PLN
Funding Volume Target 2014: EUR 9 – 11 billionFunding Volume 2014 ytd: EUR 10 billion
EUR: 60%, USD: 36%, other: 4%Duration: 5.7 years
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2. NRW.BANK Green Bond Strategy
NRW.BANK actively supports the climate protection policy on behalf of the state
NRW.BANK’s overall targets
Increase environmental driven standards of living
Reduce North Rhine-Westphalia’s global carbon footprint
Attenuate climate change results, e.g. flooding
Improve ecological water management
Contribute to protect and develop biodiversity
NRW.BANK Green Bond Programme
Increase visibility of NRW.BANK’s sustainable loan book
Highlight NRW.BANK’s activities towards Capital Markets participants
Support the further development of the Green Capital Market; trigger more investments in green assets
NRW.BANK Green Bonds will be issued regularly
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2. NRW.BANK.Green Bond 2014 – Eligible Assets
Funds raised by NRW.BANK’s Green Bond will be used to finance environmentally friendly projects in North Rhine-Westphalia in the fields of:
NRW.BANK – Adaptation*
River restoration -> flood management
Dam (maintenance) -> flood prevention, drinking water and canal regulation
Ecological improvement of the water management -> drinking water
Biodiversity
Damages due to climate change -> heavy rain, storm
NRW.BANK – Mitigation*
Improve energy efficiency
Manufacturing facilities (brownfield)
Traffic: public transport (brownfield) and electric mobility (greenfield)
Power-heat cogeneration (greenfield)
Public buildings: energy renovation of existing buildings (brownfield)
Public buildings: new construction (greenfield)
Water
Wastewater treatment* Definition as defined by MDB Climate Finance
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2. NRW.BANK.Green Bond 2014 – Concept
Reliable use of proceeds
Projects are “live“
(Re)financings throughout the current calendar year
Clear wording on the use of proceeds
No re-investment risk
Shortest loan maturity determines the longest maturity of the issuance
No dilution of the asset structure -> no taps
Transparent reporting
Financial Report/Corporate Responsibility Report
www.nrwbank.com/greenbond
However: banking secrecy has to be respected
Cost efficiency
Ringfencing is not necessary -> No additional asset/liability-cycle
Internal earmarking
Good sustainability ratings and reputation
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2. NRW.BANK.Green Bond 2014
Main details of the transaction:
Timeframe: autumn 2014
Maturity: 3-4 years
Issuing Volume: 500 Mio
Currency: EUR
Denomination: 1,000
Fixed Coupon
WKN: NWB0AB
NRW.BANK.Green Bond 2013:
Classified as Green Bond (CBI)
Included in the Solactive Green Bond Index
Included in the S&P Green Bond Index
Debt Issuance Programme:
Senior Unsecured Bond
Explicit Guarantee
Leads:
2nd opinion:
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2. NRW.BANK.Green Bond 2014Use of Proceeds
Asset allocation*
Clear focus on energy
The „Use of Proceeds” used for NRW.BANK’s Green Bond will be documented in the Final Terms of the Green Bond:“The Issuer will invest an amount equal to the estimated net proceeds of the Notes in loans for projects in water management, energy efficiency, renewable energy or electric mobility, subject to and in accordance with the lending standards of the respective loan programmes. (If the estimated net proceeds cannot be applied to theses projects, a corresponding amount will be used for thematically corresponding projects within the business operations of the Issuer in accordance with the Act on NRW.BANK and its mandate of providing promotion loans.)”
Water EUR 130 million
River (Restoration) 100%Energy EUR 370 million
Construction/Renovationof Universities
68%
Energy Infrastructure (mostly wind energy)
22%
Efficiency Facility 10%* Approximately
Energy
74%
Water
26%
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2. NRW.BANK.Green Bond 2014Example: Projects in the field of „water“
River (Restoration)Example: Emscher River
One of the largest single infrastructural project in Europe
Period of project: nearly 3 decades until 2020
Total capital expenditure: EUR 4.5 billion, partially financed by NRW.BANK
The river and its tributaries will be converted into natural waterways
Most modern wastewater system: the sewage pipe along the stretch of river from Dortmund-Deusen to the confluence with the Rhine nearDinslaken – a construction 51 km long and reaching depths of 40 m
Recreation area of 100 km2
Maturity: 30 years
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2. NRW.BANK.Green Bond 2014Example: Projects in the field of „energy“
Bau- und Liegenschaftsbetrieb North Rhine-Westphalia (BLB)
New construction and (pollutant) cleanup of public buildings in accordance with modern environmental standards (30% improvement of EnEV standard)
Total amount: EUR 250 million
Topics:
Asbestos / PCB cleanup
Power-heat cogeneration / photovoltaic / geothermal energy
Air conditioning control based on weather forecasts
Projects:
Construction of “Energy Campus-Lab” at the University of Applied Sciences (HRW) in Bottrop
Construction of a new tax office
Replacement of windows at the Higher Regional Court in Cologne
Ruhr-Universität Bochum and Heinrich Heine University renovation projects
Maturity: 16 years
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2. NRW.BANK.Green Bond 2014Example: Projects in the field of „energy“
Energy infrastructure (NRW.BANK.Energieinfrastruktur)
Low interest loans for the financing of investments in energy infrastructure (i.e. wind energy plants and privately owned wind-farms)
Eligibility: commercial domestic and foreign companies, companies which are publicly owned by majority, professionals, private investors
Purpose of use: Investments in plants for energy generation, storage and distribution in North Rhine-Westphalia, incl. purchase of land and buildings, commercial building costs, purchase of facilities and machinery, factory and office equipment
Loan amount: between EUR 250,000 and EUR 150 million
Maturity: 3 to 30 years
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2. NRW.BANK.Green Bond 2014 Example: Projects in the field of „energy“
Efficiency Facility (NRW.BANK.Effizienzkredit)
Interest subsidised loans for companies to improve their energy efficiency and efficiency of resources
Eligibility: Manufacturing companies which are privately owned by majority
Purpose of use: e.g. measures for conservation of energy and improvement of energy efficiency; decline of raw material charge and input of water; closing of cycle of materials; decline and reservation of wastewater charges; avoidance or decline of wastewater; avoidance of commercial and industrial waste; reduction of noise and polluting emissions
Conditions:Projects with a lasting increase of energy efficiency (min. 20%) or resource efficiency (min. 10%); for lower increase of efficiency – projects eligible on the basis of a certified procedure to protect the environment (e.g. Environmental Management System)
Loan amount: between EUR 25,000 and EUR 5 million
Maturity: 4 to 10 years
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2. NRW.BANK.Green Bond 2013 – due 2017
Inaugural NRW.BANK Green Bond
Water: river restoration, fresh water supply. Side effect: improved
flood management and increased biodiversity
CO2 reduction: SME Efficiency Facility and e-mobility
Maturity: 4 years, Size: EUR 250 million
Half of the Investors are SRI driven
The issue was priced in line with price guidance area
Midswaps – 6 bps
36.7 bps over OBL 164
Highly diversified order book: 25 individual orders
ISIN: DE000NWB0AA4 Coupon: 0.75 %
Maturity: 28 November 2017 Leads: Crédit Agricole - CIB, DZ BANK
Regional Breakdown
Sector Breakdown
France15%
Germany
40%
Asia
12%
The Netherlands
26%
other Europe
7%
Fund Managers
34%
Banks40%
Insurance2%
Central Banks &
Official Institutions24%
Appendix
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Appendix – NRW.BANK Programme
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Appendix – Green Bond „market standards“
Green Bond Principles (GBP)
Important step for a standardisation
Avoidance of green washing
Green Bond Benchmarkindices
MSCI and Barclays -> active
Solactive -> active
Classification by Climate Bonds Initiative (CBI)
Issuance volume: at least USD 100 million
Maturity: at least 6 months
S&P Green Bond Index -> active
Classification by Thomson Reuters and CBI
Maturity: at least 1 month
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Appendix – Sustainability at NRW.BANKEnvironmental Aspects – Carbon Footprint
CO2-emissions per employee
3,570
1,225 1,362 1,319
0
1.000
2.000
3.000
4.000
2007 2009 2011 2013
in kg CO2
Energy from hydropower
Company car policy with:short contractual periods ensuring
most modern/efficient car fleetecological advise
a fleet average target
Green-IT
Combined heat and power
(district heating)
Use of the most modern energy
efficiency technology during building
and renovations
Video conference system
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Appendix – Sustainability at NRW.BANKEnvironmental Aspects – Consumption
Successful reduction of consumption
figures since 2007:
Water down 44%
Paper down 31%
Waste down 58%
Electricity Usage:
Marginal decrease of 4% per employee
Focus on resource-saving technology
Water consumption per day / employee
575759
101
40
60
80
100
2007 2009 2011 2013
in Litres
Paper consumption and waste volume
per employee
435
52 44 39 36
166 175 184
0
100
200
300
400
2007 2009 2011 2013
in kg
Paper
Waste
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Contacts
Klaus Rupprath
Capital Markets
+49 211 91741 5000
Andreas Berning
Treasury
+49 211 91741 4334
Dr Frank Richter
Investor Relations
+49 211 91741 5555
Bloomberg NRWBK <Govt> <GO> • Reuters NRWB01
NRW.BANK • Capital Markets • Kavalleriestrasse 22 • 40213 Duesseldorf
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Disclaimer
The information contained in this presentation has been thoroughly researched. Nevertheless, it does not claim to be complete and the information contained therein may be subject to changes. We shall not be liable for any information provided herein.
The presentation constitutes neither an offer nor an invitation to buy securities. It must not be viewed as personal or general advice on the basis of which investment decisions can be made.