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Climate Bond financing adaptation actions in Paris

    

Source: ©Marie Gantois, City of Paris

Name

Paris

Country

France

Inhabitants

2,240,000   (2012)

Climate Impact(s)

         

    

Adaptation measures financed

  •   Green spaces in urban areas
  •   Planting 20,000 trees
  •   Establishing 30 hectares of new parks by 2020

Financing source(s)

       

Private   investors

       

Municipality   budget

Financing type(s)

Financing of   adaptation measures via an investment instrument with returns (climate bond)

Financing mechanism(s)

Climate bond managed   by independent financial institutions; implementation of business case

Summary Description: The Paris Climate bond was issued in November   2015 to finance projects in climate mitigation and adaptation. The total size   of the bond is €300 million, with a running time until May 2031. The Bond   aims at private investors who consider it as a secondary advantage to invest   in the sustainability of the city of Paris. They will receive a profit rate   of 1.75% per year. Transparency is ensured by annual reporting, where the   issuer has to justify the allocation of money to projects complying with the   set criteria. The process and report is reviewed by the non-financial rating   agency Vigeo, thereby providing investors reassurance on the use of their   funds. Two banks were selected   through competitive tendering to accompany the City of Paris in the process   and to be partners. The City of Paris benefitted from their expertise on   investor expectations, their network and marketing services. The selection of projects to be   included in the Bond is managed by the Finance Management Support Service   (SGF) of the city in full collaboration with the Urban Ecology Agency (AEU)   and overseen by Vigeo. The selection process consists of two steps according   to criteria that are a combination of criteria brought forward by SGF and   criteria which are usually used for socially responsible investments (SRI).20%   of the bond funds have been assigned to adaptation projects. Currently, two   projects with a climate adaptation objective and are being implemented:   planting 20,000 trees in the city and creating 30 hectares of new parks by   2020.

Main Challenge for implementation: ideally the local authority needs expertise   on the green market and knowledge of what is expected or valued by investors.

Main success factor for implementation: The participation of independent advisors,   sectoral experts in Green bonds and bankers, as well as independent financial   rating agency.

Contact

Climate, energy and circular   economy department

Email: planclimatdeparis@paris.fr 

Long version on Climate-ADAPT:

https://goo.gl/OmX3mp

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