Weekly ESG News: Financial Services and Insurance Industry
News in the spotlight: Gabon announced a $500mn debt-for-nature swap
Gabon has announced a $500 million debt-for-nature swap, the largest such deal in Africa, partnering with the Bank of America, US International Development Finance Corporation (USDFC), and The Nature Conservancy (TNC) to refinance debt for marine conservation. The deal, structured under a Blue Bond, involves Gabon committing to spend $5 million annually from savings over 15 years for marine conservation, aligning with its “Gabon Bleu” initiative to protect marine resources. The USDFC is providing political risk insurance for the financing, while the TNC’s strategy aims to protect oceans through “Blue Bonds.” This move is in line with Gabon’s commitment to safeguard 30% of its ocean territory by 2030, and it reflects a growing trend of using financial mechanisms for environmental protection.
Weekly Sustainable Finance Newsletter 34/2023
ESG News of the last week in detail
Products and Service
CPP Investments Commits US$30 Million to Amazon Reforestation Fund
Canada Pension Plan Investment Board (CPP Investments) will invest up to $30 million in The Amazon Reforestation Fund managed by Brazilian startup Mombak, focused on restoring the Amazon through reforestation. The fund aims to create high-quality carbon removal credits by replanting native trees on Brazilian pastureland. CPP Investments sees the value in nature-based carbon credits as part of decarbonization efforts. This marks CPP Investments’ first investment in Brazilian reforestation and aligns with their sustainable energies focus. Mombak CEO, Peter Fernandez, highlights the significance of collaboration for generating credible carbon removal credits. Read more here.
Deutsche Bank provides $125mn funding for Redaptive
Redaptive, a leader in Energy-as-a-Service (EaaS), has secured $125 million financing from Deutsche Bank’s US Private Credit & Infrastructure group. The financing will accelerate the deployment of energy-saving and sustainability solutions such as metering, HVAC, solar, LED, and EV. Deutsche Bank’s warehouse facility will securitize Redaptive’s customer contracts, enabling competitive pricing for EaaS and data offerings. Redaptive’s EaaS helps corporations achieve net zero goals through fully-funded energy upgrades and tracking building performance. This partnership supports Redaptive’s position in the market and contributes to shared net-zero ambitions. The financing addresses a significant portion of global carbon emissions from buildings.
MEAG expands its Infrastructure debt fund family for institutional investors
MEAG has introduced the MEAG Infrastructure Debt Fund III, expanding its private-debt investment fund range. This fund focuses on senior secured infrastructure debt financing in Europe, particularly in Transport, Social, Communication, and Energy & CleanTech sectors. The fund prioritizes environmental and social factors in its investment strategy, in line with Article 8 SFDR. It aims to provide stable, attractive long-term returns by issuing debt financing to strategic European infrastructure projects. MEAG’s expertise in infrastructure investments is demonstrated through their successful prior funds, MEAG Infrastructure Debt Funds I and II. MEAG manages assets valued at around €324 billion, including €56 billion for external clients.
Gabon announced a $500mn debt-for-nature swap
Gabon has announced a $500 million debt-for-nature swap, the largest such deal in Africa, partnering with the Bank of America, US International Development Finance Corporation (USDFC), and The Nature Conservancy (TNC) to refinance debt for marine conservation. The deal, structured under a Blue Bond, involves Gabon committing to spend $5 million annually from savings over 15 years for marine conservation, aligning with its “Gabon Bleu” initiative to protect marine resources. The USDFC is providing political risk insurance for the financing, while the TNC’s strategy aims to protect oceans through “Blue Bonds.” This move is in line with Gabon’s commitment to safeguard 30% of its ocean territory by 2030, and it reflects a growing trend of using financial mechanisms for environmental protection.
Regulatory and Law
UK Government shortlisted projects for Hydrogen Fund
In the 2022 allocation round for the Net Zero Hydrogen Fund in England, Scotland, and Wales, a shortlist of electrolytic hydrogen projects with a total capacity of 408MW has been compiled. The projects not selected in this round can reapply for the second round. Approximately 250 MW of capacity will be awarded in Q4 2023, and the first operational projects are anticipated by 2025.