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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
Green Bonds are growing fast globally
Green Bonds are growing fast globally
Standards create confidence in the market
Source: Climate Bonds Initiative
Green Bonds are growing fast globally
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
Capture global capital flowsGreen Bond Funds are looking to deploy capital
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
The steps to issuance
Example: Land Value Capture ModelHow to finance climate-resilient transport systems for Asia
Source: Asian Development Bank
Land Value Capture ModelHow to finance climate-resilient transport systems for Asia
Land Value Capture ModelHow to finance climate-resilient transport systems for Asia
Source: Asian Development Bank
Land Value Capture ModelHow to finance climate-resilient transport systems for Asia
Source: Asian Development Bank
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
Land Value Capture ModelHow to finance climate-resilient transport systems for Asia
“Rail + Property” model in Hong Kong