AIB bank has raised €750 million through the issuance of its fourth green bond this week, the proceeds of which will go towards financing environmental and climate action projects.
Interest in the bond peaked at almost €1.5 billion, with 94 investors across 22 countries ultimately buying into it. This allowed the bank to issue it at a midswap price of +2.85%.
The bank announced the success of the bond on Wednesday (November 9), which came as world leaders, including Taoiseach Micheál Martin, held discussions at the United Nations Climate Change Conference COP27, in Egypt.
Finance is set to play an enormous role in climate action, funding projects and tehcnologies that will help to reduce greenhouse gases (GHGs), boost climate resilience and restore biodiversity.
In a statement AIB said that the investment that will be required to finance the transition to a low carbon economy can be counted in the trillions of dollars globally.
Within Ireland, the International Monetary Fund (IMF) has estimated that the cost will amount to about €20 billion per annum over the next decade. The IMF has also estimated that much of this funding will be sourced from the private sector.
AIB CEO Colin Hunt said that the bank is already actively supporting the transition to a low-carbon future by reducing its own carbon footprint.
“We aim to play a significant role in helping the government and the European Union meet their carbon reduction targets.
“Our ambition is that 70% of new lending will be green or transition by 2030. And we are making great progress towards achieving that goal as green lending already increased to 24% of new lending in the first nine months of the year,” he said.
Hunt said that the more ‘green lending’ the bank does, the more attractive it becomes to environmental, social and governance (ESG) investors, who look to focus on companies with strong credentials in this area.
Over the past two years, AIB has raised over €3.25 billion via green bonds, which it first issued in 2020. It also doubled its Climate Action Fund to €10 billion last year, accelerating the rollout of products and services that assist corporate and small business customers in transitioning to a low-carbon economy.