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ADB Sells €600 Million 7-Year Green Bond to Spur Climate Financing

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The Asian Development Bank (ADB) has raised €600 million to help finance climate change mitigation and adaptation projects with the issue of a 7-year green bond.

“Since the inaugural US dollar denominated green issue in 2015, ADB has steadily expanded its green bond offerings, having pioneered the dual-tranche format for supranational green bonds in 2016 and issuing its maiden green Indian rupee-linked bond in 2017,” said ADB Treasurer Mr. Pierre Van Peteghem. “We are very pleased to accommodate the strong demand for our green bonds from euro investors with last night’s offering, which allowed us to both tighten price guidance while increasing the issue size for our first euro denominated benchmark green bond.”

Proceeds of the green bond will support low-carbon and climate resilient projects funded through ADB’s ordinary capital resources and used in its non-concessional operations.

In July 2017, ADB adopted its Climate Change Operational Framework 2017–2030. The framework strengthens ADB’s support to its member countries in meeting their climate commitments under the Paris Agreement, the Sustainable Development Goals, and the Sendai Framework for Disaster Risk Financing—including nationally determined contributions for reducing greenhouse gas emissions.

ADB’s financing of climate mitigation and adaptation reached a record $4.5 billion in 2017, a 21% increase from the previous year. ADB is now in position to achieve its $6 billion annual climate financing target by 2020. Out of the $6 billion, $4 billion will be dedicated to mitigation through scaling up support for renewable energy, energy efficiency, sustainable transport, and building smart cities, while $2 billion will be for adaptation through more resilient infrastructure, climate-smart agriculture, and better preparation for climate-related disasters.

The 7-year bond has an issue size of €600 million, a coupon rate of 0.35% per annum payable annually and a maturity date of 16 July 2025. It was priced at 99.924% to yield 43 basis points over the DBR 0.5% February 2025.

The transactions were lead-managed by Bank of America Merrill Lynch, Citi, and Credit Agricole CIB.

The issue achieved strong primary market distribution with nearly 90% placed in Europe, the Middle East, and Africa (EMEA); and 10% placed in Asia. By investor type, 39% of the bonds went to central banks and official institutions; 12% to banks; and 48% to fund managers, insurance, pension funds, and others.

ADB plans to raise around $23 billion from the capital markets in 2018.

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Landmark Agreement Unites Parties in Boosting Commercial Space Operations in California

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Leaders from the State of California, REACH, the 30th Space Wing, Cal Poly State University and Deloitte today announced a commitment to develop a thriving spaceport at Vandenberg Air Force Base and the surrounding area. According to the memorandum of understanding, the parties will develop a master plan that identifies the required infrastructure, human capital development, governance and financing necessary to support the United States Space Force mission and position California as a global leader in the future of the commercial space industry.

Chris Dombrowski, Acting Director of GO-Biz, said: “California has been at the forefront of the aerospace industry for more than a century. This MOU cements that leadership and serves as a critical investment in California’s innovative economy as we work to safely recover from the COVID-19 induced recession. This cross-sector partnership will bring quality jobs to the central part of our state with Vandenberg Air Force Base serving as a thriving spaceport and the nation once again watching California.”

The memorandum is a key part of a larger strategy for economic development in the Central Coast region, built in collaboration with the governor’s Regions Rise Together initiative, REACH and Deloitte.

“This is a once-in-a-generation opportunity for the State of California to drive the space industry into the next century,” said Josh Nisbet, a managing director at Deloitte Consulting LLP, who leads its work for the state. “The foresight of leaders in California and in our national security agencies has put the Central Coast and Vandenberg Air Force Base in position to become a world-class spaceport and center of excellence in a quickly evolving market. Deloitte is thrilled to be supporting this journey.”

The U.S. government, in its first National Space Strategy, identifies the space industry as a top priority and highlights dynamic partnerships between government and commercial partners as essential to our economic prosperity, national security and scientific knowledge.

Col. Anthony Mastalir, 30th Space Wing Commander at Vandenberg Air Force Base, said: “Space is critical to national security, and the National Defense Strategy provides a very clear direction to restore our competitive edge in the re-emerging power competition to maintain space superiority. We rely on robust collaboration with our industry partners not only to provide assured access to space but also to maximize our range capacity and move forward into the range of the future.”

The region boasts several attributes that make it an ideal location for commercial space operations, a sector that is likely to lead high-quality job growth over the coming decades. Vandenberg already maintains active launch capabilities and favorable geography, and Cal Poly produces world-class engineering and science talent.

“The potential for the commercial space industry to provide significant jobs and economic impact to not only the Central Coast, but the entire state of California, make it worth pursuing aggressively. Through diverse partnerships and collaboration, we will ensure the Central Coast of California is the launchpad for the next frontier of commercial space,” said Melissa James, CEO of REACH.

The commercial space activities centered on the base could support a larger industry, and parties envision a robust cluster of space-related activities taking root in the region, with sustained presence of companies across the ecosystem from manufacturing and launch to maintenance and support and enabling human spaceflight for the first time in California.

Cal Poly President Jeffrey D. Armstrong said: “With its strong tradition of Learn by Doing, Cal Poly is pleased to work with other institutions in the region to play an instrumental role not only in developing the workforce of the future but also in spurring innovation and teaming with industry to foster growth and reach new milestones. We’re excited to play a key role in supporting the possibilities this landmark agreement holds.”

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Niger: World Bank Approves $250 Million to Boost Long-Term Growth

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The World Bank Board of Directors today approved a total amount of $250 million in International Development Association (IDA) credit and grant to help Niger develop its human capital and to mitigate the impact of the COVID-19.  

The Second Laying the Foundation for Inclusive Development Policy Financing (DPF) is the last operation in a programmatic series aimed at reducing gender gaps and providing cash transfers to households that are mostly affected by COVID-19. The program will also help expand access to electricity and potable water, improve debt management and transparency, and reduce fiscal risks. 

“The new program will help the Government pursue the reforms started to create enabling conditions for sustained and accelerated medium-term growth and tackle key structural challenges related to stark gender inequality and low access to key infrastructure,” said Joelle Dehasse, World Bank Country Manager for Niger. “This operation has been adjusted to reinforce actions that complement the government’s efforts to mitigate the impact of the CODIV-19 pandemic.”

In 2019, Niger’s economic performance remained robust, driven by strong performance in the primary and tertiary sectors. Real GDP growth was 5.8 percent, with 1.9 percent per capita growth. However, since March 2020, the COVID-19 pandemic is straining the country’s economy, mainly due to increased spending on health and social assistance services for vulnerable households. The pandemic’s adverse impact on regional and international trade, and on foreign direct investments is also severely affecting the country’s economic and social development.

“The adoption of reforms through this DPF series will help improve the livelihoods of communities in these times of COVID-19 pandemic,” said Luc Razafimandimby World Bank’s Senior Economist and co-Task Team Leader for the project. “Beyond the much-needed quick fixes, the DPF maintains its core structure to protect the future, which will also sow the seeds of post COVID-19 recovery through mutually reinforcing measures.”  

The operation is a result of an extensive consultation process involving government officials, development partners, civil society, and other key partners. It is fully aligned with the Government’s strategy through the National Economic and Social Development Plan (2017-2021) and also with the World Bank Country Partnership for Niger (CPF 2018-2022).

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

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World Bank releases first comprehensive stock-taking of infrastructure services in Asia

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A new World Bank report presents data about infrastructure provision in three key sectors is Asia: road transport, electricity, and water and sanitation. As the first comprehensive, regional stock-taking of levels of supply, quality, and affordability of infrastructure services, Infrastructure in Asia underscores the need to better understand current levels of service delivery to facilitate governments’ infrastructure planning and financing. Well thought-out investment planning helps raise economic growth rates, increases competitiveness, offers new economic opportunities, and bolsters improvements in human capital.

Building a more extensive body of knowledge about the health of infrastructure provision worldwide is a priority for the World Bank. Infrastructure in Asia is the first step of a new research effort that will expand to other regions. The report is organized to provide regional overviews by sector, followed by country snapshots.

Over the past few decades, a large part of Asia (both East Asia and South Asia) has enjoyed strong economic growth and steady social development. Nevertheless, the region faces significant constraints in infrastructure investment. This is exacerbated by Covid-19 pandemic and the short-term challenges of a slowing global economy, higher borrowing costs, and geopolitical tensions. Longer-term, the region is highly susceptible to the effects of climate change, so infrastructure development must be sustainable and climate resilient.

Imad Fakhoury, Global Director for Infrastructure Finance, PPPs & Guarantees at the World Bank, underscored two crucial points in this context, “We must focus on smarter investments. This doesn’t necessarily mean spending more money, but harnessing technology, Infratech, and building efficiencies based on data so we can do more with less.”

He continued, “We also need better ‘infrastructure governance’—including strengthening policies, insitutions and investments, better planning, robust project preparation, investment prioritization, screening to decide whether to procure a project publicly or with private-sector support, and strong attention to resilience, quality, transparency and fiscal sustainability. This is crucial for accerating move towards resilient recovery stage as part of COVID-19 crisis response and rebuilding better.”

When it comes to building infrastructure that truly delivers economic and social impact, quality is as important as coverage. Governments worldwide and their development partners increasingly recognize the importance of resilience and quality in infrastructure service delivery. Infrastructure in Asia goes beyond appraising coverage levels to provide a set of key indicators that serve as proxies of multiple dimensions of infrastructure quality.

In addition to looking at the quality dimensions of infrastructure, the report’s signature contribution is its compliation of extensive and disparate information and data—otherwise time-intensive to gather and compare across sectors and countries—into a single volume.

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