EIB bringing digital green to Europe

3 min read
Julian Lewis

Credit Agricole and SEB are marketing Europe’s first digital green bond on behalf of Triple A European Investment Bank, for which no timing or size, maturity and coupon details have been confirmed.

The Swedish krona offering will echo a green bond landmark in 2008 from the World Bank, which issued the world’s first labelled green bond in the Scandinavian currency.

It is still unclear if insurers Skandia and LF and/or Swedish public pension funds AP2 and AP3, anchor investors in the World Bank deal, are participating in the new digital issue.

Luxembourg-headquartered EIB is also a green bond pioneer. Its groundbreaking 2007 climate awareness bond – the first use-of-proceeds deal – was an equity-linked instrument in euros.

The new issue will also bear the supranational’s CAB label.

The deal will be registered and settled via the so|bond blockchain platform that the bookrunners announced in April.

They describe the initiative as a “sustainable and open” platform that aims to reduce the environmental impact of IT infrastructure and remove the barriers to digital green bond issuance. It uses a new blockchain validation protocol called “Proof of Climate awaReness” that encourages participants to minimise their environmental footprints.

The open-source approach contrasts with the plethora of proprietary blockchain bond platforms. These now number 32 in addition to so|bond, according to the International Capital Market Association's technology directory.

They include BNP Paribas' AssetFoundry, Clearstream’s D7 Goldman Sachs’ Digital Assets Platform, HSBC’s Orion and Societe Generale’s Forge.

The deal follows other recent developments in digital bonds, the most notable being Hong Kong's HK$800m (US$100m) digital green sovereign bond in February.

In March the European Stability Mechanism backed the establishment of a digital euro to ease the path to the wider use of blockchain bonds

The EIB has also been active in the area. It issued a £50m blockchain bond via Orion in February, having also raised €100m digitally through GS DAP in December and the same amount through Forge in May 2021.

Other recent moves include KfW printing Germany’s first digital bond in December via D7, followed by Siemens in February. Last July an EDF subsidiary completed the first digital renewable energy project bond on AssetFoundry, while Union Bank of the Philippines issued a rare emerging markets deal.

In 2021 Switzerland’s SIX Group issued what it described as the world’s first fully digital regulated bonds, while the country’s City of Lugano issued a digital muni bond in January.

Although the new EIB deal will rank as Europe’s first digital green bond, Austrian utility Verbund completed a digital green Schuldschein in 2018. Helaba arranged the €100m 10-year loan, which was executed through the VC Trade platform.