The European Investment Bank (EIB), BNP Paribas and Vigeo have launched Tera Neva, a sustainable investment solution which allows investors to align their financial objectives with their energy transition goals.
Through Tera Neva, the EIB is issuing a €500 million equity index-linked bond, in its Climate Awareness Bond format, which dedicates proceeds to renewable energy and energy efficiency projects.
The transaction, arranged by BNP Paribas, is 100% capital guaranteed, BNP Paribas states.
The payoff is linked to the performance of the ‘Ethical Europe Climate Care Index’ over the life of the bond, floored at zero and paid at maturity. This Index consists of 30 European equities (reviewed quarterly) selected on financial and sustainability criteria based on Vigeo and Solactive filters.
Bertrand de Mazières , Director General of Finance at the EIB, said: “Tera Neva enables investors to combine financial performance with climate conscious investing, and demonstrates our willingness to cater to investor demand for tailor-made climate finance products.”
The Tera Neva initiative reflects investors’ growing interest in combining financial performance with impact investing. It shows investors’ willingness to reduce the impact of their portfolio on climate change, finance energy efficient projects in Europe and beyond, and also to invest in companies with a robust energy transition strategy, BNP Paribas’ press release reads.
This initiative is supported by a group of institutional investors which has invested a total amount of €500 million in Tera Neva.
Climate Awareness Bonds provide investors with the opportunity to associate their investment with projects contributing to climate action, with EIB as an issuer.
The funds raised via these issues are earmarked for EIB lending projects within the fields of renewable energy including projects such as wind, hydropower, wave, tidal, solar and geothermal production, and energy efficiency projects like district heating, cogeneration, building insulation, amongst others.
To remind, EIB has recently increased Climate Awareness Bond to the outstanding figure of €1 billion.
The Ethical Europe Climate Care Index is calculated by Solactive, a global index provider. It is designed to engage companies on their energy transition strategy and include a unique filtering methodology. The Index aims at reducing investors’ carbon footprint by selecting 30 European stocks, based on their carbon footprint and on the robustness of their energy transition strategy.
BNP Paribas is an international bank and financial services company with global headquarters in Paris.
Image: EIB