AIB raises €750m for climate projects through new green bond

Proceeds will be used to finance initiatives with clear environmental benefits

AIB has raised €750 million after completing its second green bond issuance, the bank said, bringing to €1.75 billion the total it has raised from green bonds to date.

The bank, which issued its first green bond in September 2020, said the proceeds would contribute to the financing of projects with clear environmental and climate-change benefits, and would also further strengthen AIB’s regulatory capital position.

"Investors are increasingly considering environmental, social and governance [ESG] factors when it comes to making investment decisions," said AIB chief executive Colin Hunt.

“Many ESG investors believe firms can ‘do well by doing good’ as they seek to future-proof themselves by managing risk more effectively, delivering sustainable longer-term returns for shareholders and having a positive impact on the economies and societies in which they operate.”

The €1 billion green bond issued by AIB last year was the first of its kind in the Irish market. Bank of Ireland followed with a €750 million bond in March.

Green lending

In 2020, AIB advanced almost €1.5 billion to back a range of green initiatives including renewable energy projects, low-carbon offices and the construction and purchase of energy-efficient homes, Mr Hunt said.

The bank’s target for green lending is that it should account for 70 per cent of its overall new lending by 2030.

“Today’s green bond issuance represents another vote of confidence by investors in AIB’s sustainability credentials, further strengthens our capital position and leaves us well placed to support a sustainable economic recovery as we emerge from the Covid crisis.’’

The order book was twice oversubscribed, the bank said.

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics