The Clean Energy Finance Corporation has made a $20 million cornerstone investment in the world’s first university-issued certified climate bond, issued by Monash University.
The $218 million climate bond, certified by the global Climate Bonds Initiative, creates an important new asset class for the financing of sustainability and clean energy projects in the university sector, and confirms Monash University’s leadership role in this area.
“Monash University has a well-earned reputation for its commitment to sustainability,” said CEFC debt markets lead Richard Lovell.
“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.”
Over the next two years, Monash University will allocate capital raised through the bond to a portfolio of projects that achieve certification in accordance with the standards of the Climate Bonds Initiative.
Monash University president and vice-chancellor Professor Margaret Gardner AO said: “As a truly international university, Monash has a responsibility to provide strong and visionary leadership on sustainable development. We want our campus network to be exemplars of environmental, social and economic best practice.”
This is the CEFC’s third climate bond investment this year, following earlier commitments to Westpac’s first climate bond, and to FlexiGroup’s Australian-first climate bond securitisation linked to solar PV and renewable energy assets.
“The Australia climate bond market is growing rapidly, both in the scale of our capital raisings and the diversity of the underlying assets,” Lovell said. “Through this climate bond, Monash University is increasing and diversifying the pool of eligible assets for clean energy finance, as well as providing a powerful example to the university sector that we can expect to be followed in other markets.”
In its recent market report Clean Energy Opportunities for Universities the CEFC estimated Australian universities are paying as much as $700 million in energy costs each year, producing annual emissions of more than one million tCO2-e.
CEFC University sector lead Melanie Madders said energy efficiency and greenhouse gas emissions are an increasing focus of university sustainability plans, with growing awareness that investments in clean energy technologies on campus can help reduce energy bills, decrease emissions and demonstrate leadership in research and innovation.
“University energy consumption is increasing because of rising student numbers and the high energy intensity of technologically-sophisticated laboratories and research facilities,” Madders said. “If these trends continue, the university sector will continue to face growing energy costs and increasing emissions, which proven and cost-effective clean energy technologies can help reduce.”