Award for innovation - use of proceeds (sustainability bonds): EIB

The European Investment Bank’s Sustainability Funding Team has been recognised for timely extending the use of proceeds of Sustainability Awareness Bonds (SABs) in the midst of the pandemic.

In this endeavor, this team, which is dedicated to the development and issuance of Climate Awareness Bonds (CABs) and SABs, was supported by EIB’s project experts in the areas of:

  • Health, where the new objective “health emergencies response and preparedness capacity” permitted inclusion of activities combatting Covid-19 with support to national health authorities and hospitals, laboratory facilities and networks;
  • Education, where higher education was added to eligible activities.

Aldo RomaniThe EIB Sustainability Funding Team announced these extensions to the market with the April 2020 issuance of an SEK 3 billion ($350 million) and a €1 billion ($1.2 billion) SAB.

According to one Environmental Finance Bond Awards judge: “The Covid-19 pandemic response bonds represented a key test for the market in terms of the integrity of deal structures. The EIB's well-developed internal infrastructure around sustainable financing allowed the EIB team to act quickly to build on their SAB framework with two new use of proceeds categories, one of which was to address immediate concerns around the pandemic.

Their ability to innovate in a timely, yet rigorous, manner to help address a global crisis resulted in both the introduction of a new and meaningful use of proceeds category but also helped keep the market integrity in check.”

Aldo Romani, head of EIB Sustainability Funding Team, said: “At the EIB, capital markets- and project- experts work side by side to develop sustainable investment products, reaping the fruit of years of expertise and cooperation, to the benefit of combining finance and science. With great reception in primary: SAB issuance increased by more than four times last year”.

The EIB was also awarded a 'highly commended' title in the Green bond of the year – supranational, sub-sovereign and agency (SSA) category. On 18  June 2020, the EIB  issued  a new €1 billion  CAB  due  15  November 2035, on the back of demand in excess of €6 billion.

The EIB  used the CAB  to  announce  to the market its decision to extend CAB–eligibilities to include  research, development and deployment of innovative low carbon technologies, and electric rail infrastructure and rolling stock, and electric buses.