The European Investment Bank (EIB), BNP Paribas and Vigeo have announced the launch of Tera Neva, a €500 million sustainable investment solution which allows investors to align their financial objectives with their energy transition goals.
The news comes ahead of the global climate conference, COP21 in Paris in December 2015, and follows the announcement of the French Energy Transition law.
Through Tera Neva, the EIB is issuing a €500 million equity index-linked bond, in its well-established Climate Awareness Bond format, which dedicates proceeds to renewable energy and energy efficiency projects.
The transaction, arranged by BNP Paribas, is 100% capital guaranteed. The payoff is linked to the performance of the ‘Ethical Europe Climate Care Index’ over the life of the bond. The Index consists of 30 equities (reviewed quarterly) selected on financial and sustainability criteria based on Vigeo and Solactive filters.
The EIB said the Tera Neva initiative reflects investors’ growing interest in combining financial performance with impact investing. It shows investors’ willingness to reduce the impact of their portfolio on climate change, finance energy efficient projects in Europe and beyond, and also to invest in companies with a robust energy transition strategy.
The initiative is supported by a group of institutional investors which has invested a total amount of €500 million in Tera Neva: ACMN VIE, AVIVA FRANCE, CARAC, BNP Paribas Cardif, CNP Assurances, ERAFP, GENERALI, GROUPAMA, HSBC Assurances, NATIXIS Assurances, PREVOIR and SURAVENIR.
Bertrand de Mazières, Director General of Finance at the EIB said:
“Tera Neva enables investors to combine financial performance with climate conscious investing, and demonstrates our willingness to cater to investor demand for tailor-made climate finance products.”
Tera Neva is an equity-linked bond composed of an EIB Climate Awareness Bond linked to the Ethical Europe Climate Care Index. The funds raised via the issues of Climate Awareness Bonds are earmarked for EIB lending projects within the fields of renewable energy and energy efficiency, including wind, hydropower, wave, tidal, solar and geothermal production.
A key instrument of EU public policy, the European Investment Bank is a market leader in the financing of projects tackling climate change worldwide. In 2014, the EIB dedicated over €19 billion, or 25% of its total lending activity, to climate action. Within this, the EIB strongly supports renewable energy and energy efficiency, contributing to the EU’s 2020 and 2030 climate policy targets. EIB’s overall lending in these areas in 2014 reached €8.2 billion.
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