Leading the market in developing green, social and sustainable financing and investment solutions
The green, social and sustainable finance market has more than quadrupled in recent years as investors increasingly look to source sustainable investment products, and issuers increasing look to ensure that their commercial transactions deliver positive social and environmental benefits.
In this period, local and international standards and principles for green and climate bond issuance have developed significantly. These bond markets have expanded to align with broader social and sustainability purposes, including the UN’s sustainable development goals, rather than just climate action. These principles have also moved into the loan markets, with the development of new standards for both green loans and sustainability-linked loans.
Corporate and financial institution issuers have become significant players as the market has matured and moved from straight corporate “use of proceeds” bonds into more structured issuances such as green asset backed securities (ABS). Issuers and investors in this type of capital are now seeking more innovative commercial solutions, low-cost processes, and bonds geared toward niche impact areas. As the market continues to evolve and increase in size and liquidity, it is driving down the cost of capital for green, social and sustainable projects.
Despite the obvious attraction of these new forms of capital and investment, the relative infancy of these markets can present a number of challenges for both issuers and investors, including:
- Understanding eligible project and asset taxonomies
- Mitigating reputational risks, such as “greenwashing”
- Navigating local and international standards and guidelines
- Addressing requirements to disclose, track, monitor and report use of proceeds and impact metrics
- Obtaining and maintaining external reviews or certifications.
Deep expertise, extensive experience
King & Wood Mallesons has been at the forefront of the market since its inception, including acting on NAB’s 2014 issuance of Australia’s first ”certified green bond” by a financial institution. We have acted on a large number of green, social and sustainable debt raisings – simple and complex, onshore and offshore – across a variety of sectors including energy, housing, transport, healthcare, gender equality, climate change and education.
We also advise sponsors and investors on investment funds which have impact investment strategies, on incorporating environmental, social and governance (ESG) practices and requirements into their non-impact funds and investments and on corporate ESG compliance.
We have been recognised as Australia’s leading Government & Community firm (all industries) at the Financial Review’s 2018 Client Choice Awards.
Our market experience means our team are well placed to advise issuers, intermediaries, investors, borrowers, lenders and other participants on all aspects of green, social and sustainable finance, including on:
- Bond, loan or investment lifecycle
- Issuance procedures and due diligence
- Criteria for investment
- Disclosing, monitoring and reporting the proceeds for impact conscious investors
- Establishing, and investing in, impact funds
When experience matters
Green, social & sustainable bonds and loans
Our team has built a reputation for designing simple and complex green, social and sustainable financing structures that reflect market firsts for banks both locally internationally. Our experience includes:
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- Adelaide Airport – advising on its A$50 million 7-year Sustainability Performance Linked Loan with ANZ, the first loan in Australia that incentivises a borrower to further improve and maintain its performance against a set of Environment, Social and Governance criteria.
- African Development Bank – advising on both of its Australian market Green Bonds issuances, being its A$115 million 2031 Green Bonds, and also its A$75.4 million Improve Quality of Life Bonds and A$25 million Industrialise Africa Bonds.
- ANZ – advising on its A$600 million 2020 Green Bond issuance and its €750 million 2023 UN Sustainable Development Goals (SDG)-themed Bonds in the Euromarkets, the first SDG-themed bond by an Australian issuer.
- Australian Catholic University – advising on its A$200 million Sustainability Bonds, the first in the Australian market and a global first for a university.
- Clean Energy Finance Corporation – advising on various financing projects under CEFC’s common investment mandate, including an A$100 million loan to Origin for their solar project and the financing of solar receivables, the A$100 million bond issuance with Macquarie to subsidise its ‘clean consumer asset’ financings and the $90 million facility with Mirvac for sustainable property developments in Queensland.
- European Investment Bank – advising on all six of its Australian market Climate Awareness issuances, including its A$750 million 2023 Climate Awareness Bonds and its A$1 billion 2028 Climate Awareness Bonds.
- Flexigroup – advising on its A$50 million Green ABS tranche issuance, the first Green ABS in the Australian market.
- Inter-American Development Bank – advising on its A$500 million 2024 Social (EYE) Bonds (Education, Youth and Employment).
- International Bank for Reconstruction and Development (World Bank) – advising on its A$300 million Green Bond issuance, the first Australian market Green Bond kangaroo issuance.
- International Finance Corporation – advising on its Australian market issuance of A$300 million 2023 Social Bonds, the first Australian market Social Bond kangaroo issuance.
- KfW – advising on all three of its Australian market Green Bonds issuances, being its A$1,000 million 2020 Green Bonds.
- Landwirtschaftliche Rentenbank – advising Rentenbank on both of its Australian market Green Bonds issuances, being its A$100 million 2032 Green Bonds.
- Macquarie – the first green loan by a financial institution globally (and also the first by an Australian corporate) written under the LMA & APLMA Green Loan Principles.
- Macquarie University – advising on its A$250 million Sustainability Bond.
- NAB – advising on its A$300 million Green Bonds issuance in the Australian market, its €500 million Green Bonds issuance in the Euromarkets, its A$500 million Social Bonds (Gender Equality) and its A$300 million Green RMBS tranche issuance, each as a first for an Australian issuer.
- National Housing Finance and Investment Corporation – advising on the establishment of the Federal Government’s NHFIC for the nation-wide community housing sector including on its social bond program and the first Australian market affordable housing bond issuance, being its A$315 million 2029 Social Bonds.
- NSW TCorp – the first sustainability bond program and the largest green bond issuance in Australia, being its A$1.8 billion 2028 Green Bonds.
- QBE – advising on its US$300 million 2022 Green Bonds issuance, its US$400 million Additional Tier 1 Social Bonds (Gender Equality) issuance and its investment in IFC’s 2016 Forests Bond issuance.
- Queensland Government – advising on the establishment of the government-owned A$500 million Land Restoration Fund, which aims to expand carbon farming in the state, and is to be financed through a thematic bond issuance.
- Stockland – advising on its SGX-listed €300 million 2021 Green Bonds, the first by an Australian corporate.
- Sydney Airport – advising on its A$1.4bn Sustainability Performance Linked Loan, the first such syndicated loan in Australia.
- Woolworths – advising on its A$400 million 2024 Green Bonds, as the first retailer in Australia to issue a green bond and the first supermarket in the world whose bonds were certified by the Climate Bonds Initiative.
Social impact bonds
As a leader in the Australian impact investment market, we draw on our experience in advising public agencies, intermediaries and service providers on almost every publicly offered Social Impact Bond (SIB) issuance arranged by Australian governments since 2012, including debut deals and Australian and global market firsts. Our experience includes:
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- SIBs – development and execution of SIB transactions in all active Australian jurisdictions (NSW, Queensland, Victoria and South Australia), in the policy areas of out-of-home (statutory) care, transition from care, mental health, youth unemployment, homelessness and Indigenous disadvantage.
- Market development – as lead advisers to State agencies on establishment and delivery of SIB ‘pilot’ programs and on the creation of market-defining ‘free to use’ template documentation suites.
- Capacity building – master issuance and investment arrangements for market intermediaries and dedicated impact investors, including market-firsts in the establishment of a ‘programmatic’ charitable trust platform and a ‘pay-for-success’ investment fund.
Clean and renewable energy finance
Our experience includes:
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- Ararat Wind Farm – advising GE in relation to its investment in the Ararat wind farm.
- Bango Wind Farm – currently advising lenders in relation to the financing of the Bango wind farm in NSW.
- Boco Rock Wind Farm – acting for the Lenders in relation to the $361 million Boco Rock Wind Farm.
- Bomen Solar Farm – currently advising lenders in relation to the financing of the Bomen solar farm in NSW.
- Bungala Solar Farm – acting for a syndicate of financiers on the project and financing aspects of the Bungala Solar Farm Project (Stages 1 and 2) in South Australia.
- Acting for CEFC in relation to the provision of financing in relation to a solar securitisation program.
- Cherry Tree Wind Farm – advising the financiers on the financing of the Cherry Tree Wind farm, a 56.6MW wind farm project located near Seymour, Victoria.
- Clermont and Wemen Solar Farms – advising lenders in relation to the portfolio financing of the Clermont and Wemen Solar Farms.
- Collector Wind Farm – currently advising lenders in relation to the financing of the Collector wind farm in NSW.
- Collgar Wind Farm – acting for Lenders in relation to the $450 million refinancing of the Collgar Wind Farm.
- Crudine Ridge Wind Farm – advising lenders in relation to the project financing of the Crudine Ridge Wind Farm.
- Granville Harbour Wind Farm – advising Palisade on the project and financing aspects of the Granville Harbour Wind Farm in Tasmania.
- Kennedy Energy Park – advising CEFC on the project financing of an integrated wind, solar and battery project in Queensland.
- Lal Lal Wind Farm – advising InfraRed on their investment into the Lal Lal wind farm in Victoria.
- Numurkah Solar Farm – advising lenders in relation to the financing of the Numurkah Solar Farm.
- Pacific Hydro – advising State Power Investment Corporation on its successful acquisition of the Pacific Hydro group including due diligence of key renewable energy assets.
- Sapphire Wind Farm – advising the project lenders on the A$350m project financing of NSW’s largest wind farm.
- Waterloo Wind Farm – advising the owner and developer on the project and financing aspects of the Waterloo Wind Farm in South Australia.
- Woolnorth and Mussselroe Wind Farms – acting for Guohua Energy Investment Corporation in relation to the acquisition of a 75% interest in the Woolnorth wind farms and Musselroe wind farms in Tasmania.
"A pre-eminent full-service firm offering comprehensive expertise across the full gamut of capital markets issues. Also highly regarded for its green and social bonds document suit[e]s.
"Advised National Australia Bank on its first social bond to promote gender equality under its Domestic Issuance Programme, the proceeds of which will go towards financing or refinancing assets of Australian businesses that champion women and equality.
Chambers & Partners, Asia-Pacific – Capital Markets (2019)