Canadian pension fund to issue green bonds

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Canada Pension Plan Investment Board (CPPIB), which has been actively investing in renewables over the last year, now plans to issue its inaugural Green Bond, and it claims to be the first pension fund to do so.

The additional funding will go towards CPPIB increasing its holdings in renewables, particularly wind and solar, as well as water management and energy efficient buildings.

CPPIB has announced plans over the past year to invest more than C$3 billion (US$2.31 billion) in the renewable energy sector, as it works to ensure the CPP Fund is well-positioned for the expected global transition to a lower-carbon economy.

“The issuance of Green Bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer amongst pension funds in this regard,” said Poul Winslow, senior managing director and global head of Capital Markets and Factor Investing. “The capital raised will help support strong, long-term investments in eligible green assets that position the Fund for continued success.”

Any Green Bonds issued in Canada will be issued on a private placement basis only to certain qualified accredited investors.

Last week, Brazil’s Votorantim Energia, managed by Votorantim SA, and CPPIB agreed to form a 50-50 joint venture company that will invest in renewable energy across Brazil.

CPPIB also recently said it would acquire a 396MW portfolio of six operational wind and solar power projects in Canada from Florida-headquartered NextEra Energy Partners for US$741 million.

The firm has also acquired a 6.3% stake in Indian renewables developer ReNew Power Ventures from the Asian Development Bank (ADB) for US$144 million.

Thai Bank TMB became the first to issue a green bond last week.

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