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Green Climate Fund Disburses Hope

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Dwellings on the banks of Samoa’s Vaisigano River are at risk during increasingly extreme storms. (Photo courtesy UN Development Programme)

By Sunny Lewis

SONGDO, South Korea, February 23, 2017 (Maximpact.com News) – Just three days before he left office on January 20, U.S. President Barack Obama transferred a second installment of US$500 million to the Green Climate Fund, based in South Korea’s Songdo International Business District.

To be financed by wealthy countries, the Green Climate Fund was established by 194 governments to limit or reduce greenhouse gas emissions in developing countries, and to help vulnerable societies adapt to the unavoidable impacts of climate change.

The Fund was key to the Paris Agreement on climate which took effect throughout the world on November 4, 2016. The Agreement’s stated aim is to keep climate change “well below” 2°Celsius and, if possible, to 1.5°C above pre-industrial levels.

At the UN climate treaty talks in Paris, wealthy governments, including the United States, pledged to contribute US$100 billion a year by 2020 for climate change adaptation and mitigation projects in the Global South, primarily through the Green Climate Fund.

As of January 2017, contributions to the Green Climate Fund total US$10.3 billion.

Initially, the United States committed to contributing US$3 billion to the fund. President Obama’s most recent installment still leaves US$2 billion owing, with President Donald Trump expected to stop payments entirely.

In his “Contract With the American Voter,” which defines his program for his first 100 days in office, President Trump pledges to “cancel billions in payments to U.N. climate change programs and use the money to fix America’s water and environmental infrastructure.

President Obama’s move followed a campaign coordinated by the nonprofit Corporate Accountability International , with more than 100 organizations and nearly 100,000 people asking Obama to transfer the full US$2.5 billion to the Fund.

Although that didn’t happen, the Green Climate Fund Board is already disbursing what money it does have. To date, the Fund has approved more than US$1.3 billion to support low-emission and climate-resilient projects and programs in developing countries.

This year has demonstrated that the Fund is rapidly gathering pace with regard to scaling up climate finance,” said then Board Co-Chair Zaheer Fakir of South Africa, who held developing country role on the Board. “I am proud of the progress we have made over the past 12 months in improving Fund performance and growing our portfolio of investments.

That developing country role has now passed to Ayman Shasly of Saudi Arabia, representing the Asia Pacific group.

Fellow Co-Chair Ewen McDonald of Australia, who this year retains his role representing the developed countries on the GCF Board, said, “I have high hopes that 2017 will be the year of climate finance for the Pacific.

In December, following the last GCF Board meeting of 2016 in Apia, Samoa, McDonald said, “I am really pleased that the Board approved US$98 million for Pacific proposals at this meeting. This is the largest climate finance meeting to ever be held in the region and it comes on the cusp of 2017, the year Fiji will host the UNFCCC Conference of the Parties.”

The 2017 UN Climate Change Conference, COP23, will take place from November 6 to 17 at the World Conference Centre in Bonn, Germany, the seat of the Climate Change Secretariat. COP23 will be convened under the Presidency of Fiji.

The approved projects are funded in cooperation with accredited partners of the Green Climate Fund, which can be multi-lateral banks or UN agencies, such as the UN Development Programme (UNDP).

One of the projects approved by the GCF Board in Apia was US$57.7 million for integrated flood management to enhance climate resilience of the Vaisigano River Catchment in Samoa, with the UNDP.

The Vaisigano River flows through the Apia Urban Area, Samoa’s capital and largest city, the island nation’s primary urban economic area.

As a Small Island Developing State in the Pacific, Samoa has been heavily impacted by increasingly severe tropical storms blamed on the warming climate.

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Green Climate Fund Board Co-chairs Ewen McDonald of Australia and Zaheer Fakir of South Africa join in the applause for multi-million dollar decisions to support developing countries as they mitigate and adapt to the Earth’s changing climate. Apia, Samoa, December 15, 2016. (Screengrab from video courtesy Green Climate Fund) Posted for public use

The Integrated Flood Management project, proposed by the government, will enable Samoa to reduce the impact of recurrent storm-related flooding in the Vaisigano River Catchment.

Some 26,528 people in the catchment will benefit directly from upgraded infrastructure and drainage downstream, integrated planning and capacity strengthening, including planning for flooding caused by extreme weather events, and flood mitigation measures, such as riverworks and ecosystems solutions.

Another 37,000 people will benefit indirectly from the project, which is expected to run from 2017-2023.

Peseta Noumea Simi, who heads Samoa’s Ministry of Foreign Affairs and Trade, said the project is about improving the protection of people living near the river.

You might be aware that during the cyclone in 2012, the extensive damage caused was as a result of the Vaisigano River flooding,” she told the “Samoa Observer” newspaper.

And that extended from the mountain down to the ocean. So this is the basis of this program. You will also recognize that along the Vaisigano River route, we have extensive and very important infrastructure initiatives by the government including hydropower, the bridges, the roads as well as the water reservoirs up at Alaoa. So this is what gives importance to this program.

The Vaisigano River project is one of eight proposals approved by the Board at its December meeting. And it wasn’t the only good news for the host of the biggest climate-funding meeting ever held in the Pacific region.

Of three approvals related to the Pacific, Samoa is involved in two. The second is a US$22 million grant for a multi-country renewable energy program with the Asian Development Bank (ADB).

The Pacific Islands Renewable Energy Investment Program will assist Cook Islands, Tonga, Republic of Marshall Islands, Federated States of Micronesia, Papua New Guinea, Nauru, and Samoa to move away from burning polluting diesel fuel to generate electricity and towards solar, hydropower, and wind energy.

The program offers an excellent opportunity for Pacific islands countries to share experiences and learn from the innovation ongoing in the region,” said Anthony Maxwell, ADB principal energy specialist. “It will help finance transformation of the power grids in the region.

The GCF board approved an initial US$12 million grant for Cook Islands to install energy storage systems and support private sector investment in renewable energy. This investment will see renewable energy generation on the main island of Rarotonga increase from 15 percent to more than 50 percent of overall supply.

The GCF funding will allow Cook Islands to ramp up renewable energy integration onto the grid, and lower the cost of power generation,” said Elizabeth Wright-Koteka, chief of staff, Office of the Prime Minister, Cook Islands. “This will have significant benefits to our economy and help achieve the government’s objectives of a low carbon sustainable economy,

The GCF Board also approved a US$5 million capacity building and sector reform grant to develop energy plans, build skills, implement tariff and regulatory reforms, and foster greater private sector participation in the energy sector.

To see all projects approved at the GCF Board’s December 2016 meeting, click here.


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Abu Dhabi Sustainability Week Glitters in the Sun

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The International Renewable Energy Agency exhibit at the World Future Energy Summit 2017, a part of Abu Dhabi Sustainability Week, January 16, 2017 (Photo courtesy IRENA) Creative Commons license via Flickr.

By Sunny Lewis

ABU DHABI, United Arab Emirates, January 19, 2017 (Maximpact.com News) – The oil-rich Middle East’s largest gathering on sustainability is happening this week, featuring the rock star business and opinion leaders who are shaping the present and future clean energy world.

An estimated 35,600 people representing 170 countries are attending Abu Dhabi Sustainability Week (ADSW) under sunny skies, including 80 government ministers, 382 exhibiting companies, and more than 200 high-level speakers.

As a global platform for addressing the interconnected challenges of clean energy, water and sustainable development, Abu Dhabi Sustainability Week has developed lasting partnerships with many of the world’s most admired experts and opinion formers on sustainability issues,” said Mohamed Jameel Al Ramahi, chief executive officer of Masdar, Abu Dhabi’s renewable energy company and the host of ADSW.

ADSW 2017 explores the theme “Practical Steps Towards a Sustainable Future” from January 12-21 with presentations, discussions and workshops on clean energy, water and waste.

From the podium, Mexico’s President Enrique Pena Nieto said, “Abu Dhabi Sustainability Week is a testament to the commitment of the United Arab Emirates to sustainable development and a new diversified, low carbon economy. Similar to how Mexico is leading the way as a developing country, the UAE was in fact the first country in the Middle East to set renewable energy targets at a time when there was widespread doubt about renewable energy’s viability and value.

Workshops are considering strategies to drive investment, implementation of the Paris Agreement on climate, and the challenges of adapting existing infrastructure to the new market reality of small-scale, distributed power.

Another critical new market reality was detailed by Michael Liebreich, founder and chairman of the Advisory Board, Bloomberg New Energy Finance, and Board member, Transport for London.

Developing countries are overtaking the wealthiest economies in attracting clean energy investment, with the Middle East & North Africa playing a growing role,” said Liebreich, citing research by Bloomberg New Energy Finance.

The global profile of ADSW is valuable in bringing emerging market opportunities to a wider stage,” he said, “thereby enabling greater cooperation between developed and developing economies.”

All kinds of clean energy investments are being forged in Abu Dhabi this week. “The clean energy sector has moved from the margins into the mainstream as a dynamic, commercially viable growth market,” Al Ramahi said.

The UAE Ministry of Energy, SKM Air-Conditioning and the Masdar Institute Wednesday signed an agreement to develop advanced energy-efficient building chillers specific to the Gulf Cooperation Council region.

If adopted nation-wide, the new efficient chillers could provide the UAE with national energy savings of over 20 percent while lowering life-cycle cooling plant costs. Currently 50 percent of the UAE’s electricity consumption goes towards cooling energy requirements, which can rise to as high as 75 percent during peak-day electricity use in the summer.

On another front, the United Arab Emirates announced a landmark new US$50 million grant fund for renewable energy projects in Caribbean island countries. 

Launched by Reem Al Hashimy, minister of state for international cooperation, the UAE-Caribbean Renewable Energy Fund is one of the largest-ever single investments in the region’s clean energy sector. It represents a significant deepening of bilateral relationships between the UAE and Caribbean countries.

Grant funding is provided by the Abu Dhabi Fund for Development, with the UAE Ministry of Foreign Affairs managing the initiative and Masdar leading implementation.

The announcement, which brings UAE development assistance for renewable energy to almost US$1 billion since 2013, was made on the sidelines of Abu Dhabi Sustainability Week, as part of the annual General Assembly meeting of the International Renewable Energy Agency (IRENA).

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International Renewable Energy Agency Director-General Adnan Z. Amin at the World Future Energy Summit 2017, a part of Abu Dhabi Sustainability Week (Photo courtesy IRENA) Creative Commons license via Flickr.

IRENA Director-General Adnan Z. Amin anticipates great success ahead for renewable energy. “Renewables are gaining ground by nearly every measure,” he said. “Accelerating the pace of the energy transition and expanding its scope beyond the power sector will not only reduce carbon emissions, it will improve lives, create jobs, achieve development goals, and ensure a cleaner and more prosperous future.

Introducing the third and latest annual issue of IRENA’s report, “REthinking Energy,” Amin said that the falling costs of renewable energy, driven by innovations in technology and policy, is behind the rapid spread of renewables and an accompanying host of socioeconomic benefits.

As we advance deeper into a new energy paradigm, we need to pick-up the pace of our decarbonization efforts. Policies and regulations continue to remain crucial to this end and to develop the renewables market,” explained Amin. “We are seeing more and more countries hold auctions to deploy renewables, and as variable and distributed sources of renewables take-on a greater role, regulators have implemented changes to enable grid integration at scale.”

Heating and cooling, and the potential of renewables for transport, are areas where future efforts are needed,” Amin said.

REthinking Energy,” provides insights on the innovations, policy and finance driving further investment in sustainable energy system, finding that:

  • Renewable energy auctions are gaining popularity in both developed and developing countries, generating record-breaking low energy prices;
  • Demand for battery storage is increasing rapidly and playing a larger part in integrating variable renewables;
  • New capital-market instruments are helping increase available finance by offering new groups of investors access to investment opportunities;
  • Institutional investors are moving into renewable energy as it offers stable returns over the long term;
  • New business models promise new ways to finance renewable energy.

Of the clean energy technologies, the report finds that solar photovoltaics will grow the fastest in terms of capacity and output, and new ways to store electricity will be a game changer for growing variable renewable energy generation.

IRENA estimates that battery storage for electricity could increase from less than 1 GW today to 250 GW by 2030.

Cost-effective off-grid renewables already provide electricity to an estimated 90 million people worldwide. “REthinking Energy” describes how off-grid solutions can provide modern energy to hundreds of millions more people to help the world achieve its sustainable development goals.

Achieving universal electricity access by 2030, will require us to boost global power generation – nearly 60 percent of that will have to come from stand-alone and mini-grid solutions,” said Amin. “Meeting this aim with off-grid renewables depends on the right combination of policies, financing, technology and institutional capacity.

At the World Future Energy Summit 2017, a part of Abu Dhabi Sustainability Week that aims to build the business case for renewable energy, India’s solar power industry is showcasing an unprecedented range of investment opportunities, after the Indian government’s announcement of its plans to add an additional 175 GW of renewable energy to the nation’s electricity supply by 2022.

The Indian Ministry of New and Renewable Energy plans to install 100 GW of solar power, including utility-scale and rooftop solar. The remaining capacity will include 60 GW of utility-scale wind energy, 5 GW of small hydro, and 10 GW of bioenergy.

Private sector investors are showing new interest in Saudi Arabia’s solar energy market, after the nation’s leadership included plans to add 9.5 GW of renewables to the energy supply as part of Saudi Vision 2030, a strategy announced last April.

The Vision 2030 strategy sets 9.5 GW as an “initial target” to help build the Saudi renewables sector, noting that energy consumption will triple in the next 14 years. The Saudi government confirms that it aims to achieve that target by 2023, a rapid increase from the nation’s 25 MW of installed renewable energy capacity at the end of 2015.

Saudi Arabia’s plans are supported by a comprehensive restructuring of government departments responsible for energy. Vision 2030 calls for a complete review of the country’s legal and regulatory framework to allow the private sector to buy and invest in the renewable energy sector.

The projects that will flow from Saudi Arabia’s renewable energy plan create a landmark opportunity for technology manufacturers, developers and investors in solar energy, setting out a very real, very achievable ambition,” said Roberto de Diego Arozamena, CEO of Abdul Latif Jameel Energy, the largest GCC-based solar photovoltaic developer and one of the largest in the world.

A highlight of Abu Dhabi Sustainability Week took place on Monday with the awarding of this year’s Zayed Future Energy Prize to nine pioneers in renewable energy and sustainability.

Founded in 2008, the Zayed Future Energy Prize has lit up the world for more than 289 million people through the actions of its international community of winners.

This year’s Zayed Future Energy Prize winners:

Li Junfeng, director general of China’s National Center of Climate Strategy Research, won the Lifetime Achievement award for his commitment to the adoption of renewable energy in China.

General Electric won the Large Corporation award for leadership in the wind and solar energy markets. GE’s wind business alone has commissioned 41.3 GW of total generating capacity and installed more than 30,000 wind turbines to date.

Sonnen, the German smart home and commercial energy storage system manufacturer, was awarded the prize in the Small and Medium Enterprise category for leadership in providing battery storage solutions.

In the Non-Profit Organization category, UK-based Practical Action was recognized for its work in providing deprived communities with clean energy in Africa, Asia and Latin America.

Joining them were the winners in the Global High Schools category, five schools spanning five regions of the globe: Starehe Girls’ Center, Kenya for the Africa region; Green School Bali, Indonesia for the Asia region; Bolivia’s Unidad Educativa Sagrado Corazón 4 for the Americas; Belvedere College in Ireland for Europe; and Huonville High School, Tasmania, Australia for the Oceania region.

Dr. Sultan Ahmed Al Jaber, UAE Minister of State, took great satisfaction in announcing the winners. “The Zayed Future Energy Prize continues to honor the legacy of sustainability advocated by the UAE’s late founding father Sheikh Zayed bin Sultan Al Nahyan,” he said. “With each awards ceremony, the UAE leadership accelerates the pursuit of innovation, reinforces the significance of sustainability at the top of the global agenda, and gives opportunities and far-reaching benefits to communities around the world.

Since the start of the Zayed Future Energy Prize awards, over 25 million people in Africa and Asia have been provided with access to modern, clean energy, off-setting more than one billion tons of carbon emissions, and ensuring that 17 million school age children can study at night using innovative solar-powered utilities.

Chair of the Zayed Future Energy Prize Jury Ólafur Ragnar Grímsson, former president of the Republic of Iceland, said, “Through the sustainable actions of its winners, the Zayed Future Energy Prize is a model example for how far the world has come in the last nine years. It is extraordinary that, through the impact of each winner and the lives they continue to improve, we now see a growing strength in being able to deliver a sustainable future.


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Maximpact’s Tom Holland Founder & CEO was proud to attended the ADSW from Maximpact‘s Masdar City Office.

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USA: 100% Renewables by 2050?

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America’s most powerful wind farm – 1.5 gigawatts in size, generating enough electricity for a city of millions – is on the edge of the Mojave Desert at the foot of the Tehachapi Pass, site of one of the earliest and still largest collections of windmills in the world. In total, there are more than 5,000 wind turbines in the area. (Photo by Steve Boland) Creative Commons license via Flickr

By Sunny Lewis

WASHINGTON, DC, December 22, 2016 (Maximpact.com News) – More than 450 organizations, local officials, academics, civic leaders and businesses are calling on Congress to support a shift to powering the United States entirely with renewable energy by the year 2050.

Although the lawmakers are on holiday recess, the renewable energy advocates Wednesday delivered a letter to Congress. The signers are urging support for H.Res. 540 introduced by Congressman Raúl Grijalva of Arizona and S.Res. 632 introduced by Senators Edward Markey of Massachusetts and Jeff Merkley of Oregon, all Democrats. 

Both bills contain the same resolution calling for “rapid, steady shift” to 100 percent renewable energy. 

Burning coal, oil and gas is polluting our air, water and land. It is harming our health and changing our climate even faster than scientists predicted,” the letter warns. “At the same time, low-income communities, communities of color, and indigenous people often bear a disproportionate share of the impact.

Senators supporting the resolution include Democrats Ben Cardin of Maryland, Mazie Hirono and Brian Schatz of Hawaii, Elizabeth Warren of Massachusetts and Al Franken of Minnesota as well as Vermont Independent Bernie Sanders, who ran in the presidential primary as a Democrat.

As a technological giant, the United States must continue to lead the clean energy revolution,” said Senator Markey. “ The question is no longer if we can power our country with 100 percent renewable energy, it’s when and how we will make the transition.”

The letter points out that dozens of major corporations, including General Motors, Apple, and Walmart, have set goals to meet all of their energy needs with renewable energy. Google announced last week that in 2017, renewable energy will power 100 percent of its global operations, according to the American Wind Energy Association.

Kevin Butt, regional environmental sustainability director for Toyota Motor North America, has said he wants to take the company “beyond zero environmental impact” by eliminating carbon emissions from vehicle operation, manufacturing, materials production and energy sources by 2050.

Renewable energy is virtually unlimited and pollution-free, protecting our communities from global warming and other harmful pollution while revitalizing our local economies,” said Rob Sargent, energy program director for the nonprofit Environment America,  a national federation of statewide, citizen-based advocacy organizations.

America needs a rapid transition to clean, renewable energy and our leaders need to get on board,” said Sargent.

The letter stresses the environmental and economic imperatives for shifting to renewable energy – to help consumers, support the economy and national security of the United States, and avoid the worst impacts of climate change.

The letter says, in part, “We need to transform the way we power the country – and we need to do it fast. But, we still have a long way to go. That’s why we are calling for swift action to transition to 100 percent renewable energy.” 

For the past eight years, President Barack Obama has been a leader in bringing the world to act against climate change by moving away from fossil fuels and investing in renewables. The Obama initiative and partnership with China brought the two biggest greenhouse gas emitters into alignment on this issue. It culminated in the Paris Agreement on climate, which took effect in November, less than a year after it was agreed in December 2015, lightning speed for an international agreement.

But the renewable energy advocates will have a steep uphill path if they try to persuade the incoming administration of President-elect Donald Trump, whose Cabinet nominations demonstrate that he wants to rely on fossil fuels, extracting the maximum amount of coal, oil and gas without delay.

Trump has chosen the CEO of the world’s largest oil company, Rex Tillerson of Exxon Mobil, as his nominee for secretary of state, fossil fuel advocate and climate denier Oklahoma Attorney General Scott Pruitt as head of the Environmental Protection Agency,  former Texas governor Rick Perry, a fossil fuel supporter, as energy secretary, and Ryan Zinke of Montana to head the Department of the Interior.

Jeff Turrentine of the nonprofit Natural Resources Defense Council today called them “the Four Horsemen of the Trumpocalypse.

The renewable energy advocates point to the enormous job creation potential of transitioning to renewable energy sources, particularly in communities with high rates of unemployment or underemployment.

There are currently 310,000 people in the United States employed in the solar industry and 88,000 in the wind industry. 

The United States is projected to add more electric generating capacity from solar and wind than from any other source in 2016. More than half of all new electricity capacity added in the world in 2015 was from renewable sources.

Climate change is both the greatest threat facing humankind, and also a tremendous economic opportunity if our nation rises to meet it,” said Congressman Grijalva. “Every day our energy future becomes more obvious – either we live in the past and continue to degrade our environment, or we embrace the future of renewable energy which ensures our continued success on a global scale and leaves our children a clean and healthy planet.

Moving to 100 percent clean energy will power job creation that is good for all creation. We can and will meet this goal and now, more than ever, it is critical that we stand up and fight for our clean energy future,” said Grijalva.

The resolution is not just a pipe dream – it’s technically feasible. According to the National Renewable Energy Laboratory, the United States has the technical potential to generate more than 100 times the quantity of electricity it consumes each year as of 2016 solely from wind, solar, and other renewable resources.

Today’s resolution sends a message loud and clear to our Senate colleagues – it’s time to get serious about our climate efforts with big, bold and rapid moves to accelerate the clean energy economy,” said Senator Merkley. “Transitioning to clean and renewable energy is not only the right thing to do for clean air and a strong economy, it is what we must do to save our beautiful blue-green planet.

 


 Featured Image: Utility-scale solar power requires skilled workers. Here, workers monitor solar thermal parabolic troughs at the Adams County detention center in Brighton, Colorado. (Photo by Warren Gretz / National Renewable Energy Lab) Public domain.

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Green Bond Market Shoots Up

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By Sunny Lewis

 WASHINGTON, DC, October 27, 2016 – (Maximpact.com News) – The green bond market reported a worldwide milestone in August when aggregate green bond issuance topped US$150 billion for the first time since the World Bank issued the inaugural green bond in 2008. It was a US$400 million four-year bond issued in Sweden during the depths of the 2008 financial crisis.

 Green bonds finance projects that achieve energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, the protection of aquatic and terrestrial ecosystems, clean transportation, sustainable water management, and the cultivation of environmentally friendly technologies.

 Green bonds are similar to traditional bonds in terms of deal structure, but they have different requirements for reporting, auditing and proceed allocations.

A green bond is distinguished by its “use of proceeds” pledge, which earmarks the proceeds from sale of the bonds for specific projects with environmental benefits. Marketing and branding values not available to traditional bonds arise from this difference.

With the heightened awareness of global environmental and climate challenges, green bonds are increasingly seen as a tool that could allow the private sector to take an active part in raising the funds needed to put our society on a more environmentally sustainable footing,” wrote Charles Smith in an article ‘How the green bond market works‘ for the European Bank for Reconstruction and Development (EBRD) earlier this month.

 The EBRD first started issuing green bonds in 2010, and its portfolios of green projects now include 261 investments worth a total of €2.7 billion.

Smith, who is responsible for the day-to-day running of green bond issuance for the EBRD, views green bonds as “a new tool for helping the private sector green the world.”

Mobilising green projects is the goal but, ultimately, I think it is a much larger transition process,” Smith told a roundtable organized by the publication “Environmental Finance” last November. “It is about changing the way companies and entire societies think about and engage with the environment. And that is not done in a day.

At the same roundtable, some of the challenges were outlined by Yo Takatsuki, associate director, Governance and Sustainable Investment, BMO Global Asset Management. BMO Financial Group is a service mark of the Bank of Montreal.

I think one of the challenges is that the underlying assets that are being financed through green bonds are mostly renewable energy or energy efficiency. If we want a broader range of corporates to come to the market we need to encourage opening up the focus of projects beyond just climate change,” said Takatsuki.

I think people are struggling with impact reporting,” Takatsuki said. “For renewable energy, it is relatively straightforward, but for other types of projects the impact reporting is either not agreed or is not sufficiently established.

Smith comments on this issue in his article on the EBRD site, writing, “The reporting is made more complicated by the broadening range of issuer types – from banks to corporates in various industries – with different green assets and operating in dissimilar regions.

This makes comparing the bonds challenging to say the least, and the reputational risk for the issuer in making a mistake in the reporting could be considerable,” Smith writes.

Despite the challenges, the green bond market is growing quickly.

In 2015, green bond issuance hit what was then a record high, amounting to US$41.8 billion worth of investment worldwide. Compare that to 2012, when green bond issuance worldwide amounted to just $2.6 billion.

Of all the green bonds issued in 2015, $18 billion worth was issued in the European Union and $10.5 billion was issued in the United States, making these regions the leaders in the green bond initiative.

India and China are expected to get more involved in this type of investment in the near future.

The World Bank is a important issuer of green bonds. The bank has been very active through the first half of 2016, especially in the United States, where its issuances total over US$496 million and in India, where its issuances total over US$2.7 billion Indian rupees.

World Bank green bonds finance projects such as India’s Rampur Hydropower Project, which aims to provide low-carbon hydroelectric power to northern India’s electricity grid.

The World Bank Green Bond raises funds from fixed income investors to support World Bank lending for eligible projects that seek to mitigate climate change or help affected people adapt to it.

The product was designed in partnership with Skandinaviska Enskilda Banken (SEB) to respond to specific investor demand for a triple-A rated fixed income product that supports projects that address the climate challenge.

 Since 2008, the World Bank has issued over US$9 billion equivalent in green bonds through more than 125 transactions in 18 currencies.

World Bank Vice President and Treasurer Arunma Oteh said, “We have a responsibility to our clients to help them both recognize and respond to the risks that climate change poses.” 

To date, green bond issuer groups include supranationals, government agencies, cities, states, and also corporate entities.

Investors have expressed a desire for more choice of products for their growing portfolios – green bonds from more issuers and more diverse types of green bond products that offer different risk profiles, according to the World Bank.

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Green-bond supported wind farm in Penonome, Panama. (Photo by Alessandra Bazan Testino / International Finance Corporation) Posted for media use

There are several types of tax incentives policy makers can put in place to support the issuance of green bonds. The incentives can be provided either to the investor or to the issuer.

With tax credit bonds, bond investors receive tax credits instead of interest payments, so issuers do not have to pay interest on their green bond issuances.

An example of tax credit bonds in the area of clean energy is the U.S. federal government Clean Renewable Energy Bonds (CREBs) and Qualified Energy Conservation Bonds (QECBs) program. The program allows for the issuance of taxable bonds by municipalities for clean energy and energy conservation, where 70 percent of the coupon from the municipality is provided by a tax credit or subsidy to the bondholder from the federal government.

With direct subsidy bonds, bond issuers receive cash rebates from the government to subsidize their net interest payments.

This structure also is used under the U.S. federal government CREBs and QECBs program.

With tax-exempt bonds, bond investors do not have to pay income tax on interest from the green bonds they hold, so the issuer can get a lower interest rate. An example is tax-exempt bond issuance for financing of wind projects in Brazil.

Green bond issuers report both use of proceeds and the impact achieved. Still, specific reporting requirements are under development and currently non-standard.

A coalition of organizations including leading issuers and buyers are working together to establish reporting procedures. Anticipated reporting standards include third party review by an auditor of the sustainability of qualifying projects, and annual reporting on a universal template.

Meanwhile, the Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond.

The Green Bond Principles are intended for broad use by the market, according to the World Bank. They provide issuers guidance on the key components for launching a credible Green Bond; they aid investors by ensuring availability of information for evaluating the environmental impact of their Green Bond investments; and they assist underwriters by moving the market towards standard disclosures that will facilitate transactions.


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Image: Green shoots growing in the kitchen gardens, Tatton Park, Cheshire, England, May 2010 (Photo by Will Clayton) Creative Commons license via Flickr

Floating Windfarms to Generate Power for Europe

PortugalVestasWindFloatBy Sunny Lewis

LISBON, Portugal, November 19, 2015 (Maximpact News) – Windfloat Atlantic, Europe’s second floating windfarm, will be built off Portugal’s northern coast under plans outlined this week by an international consortium of energy utilities and engineering companies.

Energias de Portugal Renewables (EDP), the French multinational electric utility company Engie, Japan’s Mitsubishi Corp and Chiyoda Corp, and the Spanish energy group Repsol are buying in by acquiring a stake in the Portuguese corporation that owns the project, Windplus, S.A.

The three or four turbines that will make up the 25 megawatt facility will float in the ocean 20 kilometers off the Portuguese coast at Viana do Castelo. Operational startup is planned for 2018.

The project will be the second floating offshore windfarm pilot in Europe, after Norway’s Statoil said this month it would invest about US$236 million in a 30 megawatt, five-turbine floating windfarm off Scotland.

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In Portuguese waters, the consortium will use the WindFloat technology, an innovative semi-submersible foundation developed by Principle Power, Inc.

EDP says the floating foundation is anchored to the seabed. Its stability comes from the use of “water entrapment plates” on the bottom of the three pillars, and a static and dynamic ballast system.

“WindFloat adapts to any type of offshore wind turbine. It is built entirely on land, including the installation of the turbine, thus avoiding the use of scarce marine resources,” EDP explained in a statement.

This technology has already been used in a first-of-its-kind prototype called WindFloat 1 close to Aguçadoura. There, a two-megawatt Vestas V80 commercial wind turbine is mounted on a WindFloat foundation and was connected to the grid in December 2011.

The prototype is the world’s first offshore wind deployment, floating or fixed, that did not require the use of heavy lift equipment offshore, and it is the first in open Atlantic waters.

This prototype has produced more than 16 gigawatts of power over nearly four years of operation, performing well even in extreme weather with with waves of up to 15 meters, according to EDP and Vestas.

The consortium says the aim of the Windfloat Atlantic project is “to demonstrate the economic potential and reliability of this technology, advancing it further in the path towards commercialization.”

Floating offshore windfarm technology makes it possible to generate electricity from parts of the ocean that are too deep for conventional offshore wind foundations.

The consortium estimates the total cost of the Windfloat Atlantic project at €121.4 million (US$130.1 million or 16 billion Japanese yen).

The project will receive financial help from the European Union.

In April 2015, the European Commission determined that the Portuguese floating windfarm project was in line with EU state aid rules.

The aid will be granted for 25 years in the form of a feed-in-tariff to compensate for the higher costs of the new technologies.

The cost estimates for ocean energy technologies submitted by Portugal show that the maximum feed-in tariff available under the scheme is “proportionate to the objective pursued,” limiting potential distortions of competition brought about by the state aid, the Commission decided.

The project will also benefit from investment aid and funding from NER300, the EU support program for innovative low-carbon energy demonstration projects.

“The development of new renewable technologies is crucial to help Europe meet its environmental commitments. Today’s approved scheme is an important step for bringing new technologies to the market.”

The Commission found that the project contributes to increasing Portugal’s share of renewable energy by developing new generation technologies.

EU Commissioner Margrethe Vestager, in charge of competition policy, said in April, “The development of new renewable technologies is crucial to help Europe meet its environmental commitments. Today’s approved scheme is an important step for bringing new technologies to the market.”

This year is already the biggest on record for European offshore wind, with a total of 584 electricity-generating turbines coming online across the Netherlands, the UK, and Germany in the first half of 2015, according to the European Wind Energy Association (EWEA).

“It has taken the offshore wind industry just six months to set the best year the sector has ever seen in terms of installed capacity,” said Kristian Ruby, chief policy officer at the European Wind Energy Association (EWEA).

“While this clearly shows a commitment to offshore wind development in Europe, a number of completed projects, explosive growth in Germany and the use of higher capacity wind turbines are major contributors to these numbers,” Ruby said.

France currently has no offshore wind installed – fixed or floating – but plans to install six gigawatts of offshore windpower by 2020.

Today, Europe’s 128.8 gigawatts of wind power can meet 10 percent of European power consumption in a normal wind year.

Wind energy will be the largest source of power supply in the EU by 2030 if governments apply the right level of ambition in their climate and energy policies, according to EWEA’s latest report, released November 17.

Wind power can exceed gas, coal and other forms of energy by the end of the next decade if European member states follow the ambitious end of the policy framework they have set for 2030, the report projects.

Giles Dickson, EWEA’s chief executive officer, said, “Wind power can be the foundation of the European energy system within the next 15 years.”


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: The prototype WindFloat 1 in Portuguese waters near Aguçadoura (Photo courtesy Energias de Portugal)
Main image: A Vestas wind turbine on a floating platform is the first-of-its-kind Windfloat Atlantic prototype (Photo courtesy MHI Vestas Offshore Wind)
Map image: Map showing the location of the Windfloat Atlantic project off Portugal’s northern coast. (Map courtesy Chiyoda Corp.)