AIB announces €1 billion green bonds to finance climate change projects

The Allied Irish Bank (AIB) has announced €1 billion worth of green bonds to finance climate change projects and activities.

AIB became the first Irish bank to complete the issuance of a green bond, and the second European bank to issue a green bond and raise associated capital, according to a press statement. The bank said the issuance of the green bond was in line with the capital and sustainability plan.

AIB said that the revenue of €1 billion would boost its regulatory capital position. The bank also stated that it would fund eligible projects such as renewable energy projects, the construction of low-carbon offices and energy-efficient homes.

Bank officials say Green Bond is the biggest unsecured transaction since the financial crisis caused by the COVID-19 pandemic. Bonds were valued at +330 points over mid-swap, a minimal new issue premium.

The bank has recently made changes to its framework to comply with EU green bond classification criteria.

“AIB’s first green bond offers socially responsible investors an opportunity to support AIB as it continues to transition its business towards greater environmental sustainability,” said Colin Hunt, Chief Executive Officer of Allied Irish Bank.

According to AIB, it raised an additional Tier 1 capital of €625 million earlier this year.

Over the past year, a climate change initiative, a new green mortgage plan and a socially responsible investment bond system have been set up.

AIB has been working on Ireland’s transition to a low-carbon economy. It aims to reduce carbon emissions by 50% by 2030.