Monash University has issued an AU$218 million green bond, becoming the first university in the world to do so.
Proceeds from the bond will be allocated to a portfolio of development projects designed to “achieve measurable sustainability outcomes in line with the global Net Zero Emissions by 2050 target,” Monash University said. The bond is structured to provide the market with investment options in US dollars and Australian dollars over 15 years, 17.5 years or 20 years.
The bond has been certified under the Climate Bonds Standard by the Climate Bonds Standards Board, and Monash University engaged Ernst and Young to provide verification that funds invested are aligned with the Climate Bonds Standard. The bond has also received Green Bond assessment [accreditation] from Moody’s Investor Services. Institutional investors in the bond are Australian and international
“As truly international university, Monash has a responsibility to provide strong and visionary leadership on sustainable development,” said Professor Margaret Gardner, president and vice chancellor of Monash University. “We want our campus network to be exemplars of environmental, social and economic best practice.”
The bond will fund a number of projects, including a major new learning and teaching building targeting 5 Star Green Star Certification at the Clayton campus, costing $180 million; the redevelopment of the Caulfield campus library, costing $43.4 million; solar panel installation, costing $6.6 million, and an external LED lighting project costing $3.5 million.
The Clean Energy Finance Corporation (CEFC) has taken AU$20 million of the bond.
“The CEFC congratulates Monash University on this successful raising, which is a world first,” said Richard Lovell, CEFC debt markets lead. “Monash University has a well-earned reputation for its commitment to sustainability. The CEFC’s involvement in this certified climate bond reflects our commitment to work alongside organisations such as Monash to help catalyse further investment options to support clean energy projects. Through our involvement in this climate bond, we are highlighting the potential of this new asset class as an important source of capital for Australian and offshore investors.”
The bond represents international best practice in rasing capital matched with climate and sustainability objectives, said Sean Kidney, CEO of the Climate Bonds Initiative.
“Monash University has joined the international pacesetters in green finance with this Certified Climate Bond,” Kidney said. “They are providing leadership by example for both domestic and international tertiary institutions and wider investment sectors.”
Monash University’s green bond becomes the fourth deal this year in the green bond space in Australia, joining Flexicorp, Westpac, and Treasury Corporation of Victoria in issuance in 2016. NAB and ANZ have previously issued green bonds in Australia.
Rachel Alembakis is the publisher of The Sustainability Report a weekly digital publication that provides reporting into Environmental, Social and Governance (ESG) issues related to companies listed on the Australian Stock Exchange.