Deutsche Bank

Corporate Responsibility
Report 2016

Financing a low carbon economy

  • One of the top European-based private-sector project financiers of clean energy
  • Arranged €3.9 billion in project finance for renewable energy projects
  • Accompanied issuance of €8 billion in green bonds

Public and private-sector collaboration will be critical to promoting and financing a shift towards a low-emissions global economy and climate-resilient development “pathways.” Energy efficient technologies and renewable energies are an essential part of a low-carbon economy and society. Significant investments will be required in the coming decades to finance these technologies. As a global bank, we can make an important contribution to raising the capital needed to implement the Paris Agreement.

As with other industries, the financial sector is exposed to climate change. Accordingly, we seek to demonstrate how Deutsche Bank contributes to the reduction of climate-related risks and how we support the transition to a low-emission economy through our core businesses.

Financing renewable energy

Deutsche Bank helps clients to develop, acquire, and sell low-carbon businesses and assets. Indeed, we are one of the top European private-sector project financiers of clean energy, while our financing and advisory services support other low-carbon and clean-tech businesses. During 2016, we arranged approximately €3.9 billion in project finance for renewable energy projects generating over 3,480 megawatts.

Our Global Markets division was debt advisor, lead arranger, and underwriter on the €1.6 billion Merkur offshore wind farm in Germany. The deal is the first large-scale project for General Electric’s new 6-megawatt offshore system of 66 turbines with an installed capacity of 396 megawatts.

We also acted as global coordinator, structuring bank, and joint bookrunner on the €404 million 20-year bond financing for the second-largest solar PV portfolio in Spain, consisting of 35 projects with a peak capacity of 98.5 megawatts, owned by Vela Energy. The bond was BBB rated by S&P, and funds were used to refinance existing bank debt.

Across the world, we financed 56 megawatts of renewable energy projects in Japan, totaling an underwriting volume of US $177 million, as well as 1,767 megawatts, totaling an underwriting volume of US $1,140 million.

Green bonds

The green bond market grew at an impressive rate in 2016, with issuance double that of 2015, at €71.9 billion. Issuers have primarily been development banks and municipalities, but since 2014 more corporations have started to fund their projects with green bonds.

A green bond ensures greater compliance with sustainability guidelines and is well equipped to prepare for more stringent reporting requirements. We have partnered with a number of issuers globally in landmark transactions for issuers, with the largest funding programs such as African Development Bank, International Bank for Reconstruction and Development, and European Investment Bank, as well as expanding access to this space for first-time issuers in newer geographies.

By the end of 2016, we had supported clients to issue €8 billion in green bonds. We managed several high-profile issues in this sector which included Tennet’s €500 million, 1.250% dual-tranche green bond offering. The proceeds from this were used exclusively to finance and/or refinance projects related to the transmission of renewable electricity from offshore wind power plants into the onshore electricity grid.

Reports suggest the green bond market will see some US $144 billion of issues in 2017, up 60% on 2016. It is clearly important to the success of implementing the Paris Agreement, and we will continue to fully support clients in identifying innovative ways to manage their risk, attracting more investors, and achieving long-term objectives.