Green Securitisation

The document details various green asset-backed securities (ABS) and aggregation mechanisms used to fund low-carbon transitions. It highlights specific instruments such as synthetic ABS, PACE ABS, solar ABS, and green covered bonds, providing examples of issuers and the types of underlying assets—ranging from energy-efficient mortgages to electric vehicle leases—that enable institutional investors to finance smaller-scale green assets.

• Securitisation allows lenders to free up regulatory capital and capacity for new business by creating asset-backed securities (ABS) from existing financial assets, such as mortgages or lease receivables, which are then sold to investors.
• Synthetic ABS is a significant tool for scaling green funds; in this structure, the issuing bank retains asset ownership but transfers credit risk to investors, allowing the bank to originate new green loans. A notable example is Credit Agricole CIB's USD3bn synthetic ABS from 2017.
• The US Property Assessed Clean Energy (PACE) model enables financing for energy efficiency and renewable energy by collecting loan repayments through property tax bills, which are then securitised into ABS. To date, 23 PACE ABS issues have totalled USD4.3bn.
• Solar ABS are primarily used to refinance residential rooftop solar, with 89% of deal volume occurring in the US. Total solar ABS issuance has reached 17 deals totalling USD2.5bn, including a first deal by SolarCity in 2013 for USD54m.
• Green covered bonds offer lower funding costs due to a dual recourse structure. Significant issuance potential exists in Germany and the Nordic countries, with examples including BerlinHyp's USD1.2bn in deals (2015-2016) and SpareBank 1 Boligkreditt's EUR1bn bond in 2018.
• Mortgage-backed securities (MBS) for green buildings have seen massive growth in the US, with Fannie Mae issuing USD26.4bn of labelled Green MBS in 2017, compared to USD3.5bn in 2016.
• China has demonstrated a diverse range of green ABS sectors, including wind turbines, public transport, and water management, with 11 deals totalling USD2.4bn. Examples include Beijing Enterprises Water Group and TGOOD's EV charging station funding.
• Other specialized green receivables ABS include Toyota Finance's USD4.6bn in green ABS for hybrid and electric vehicles, and Brazil's first green CRA ABS issued by Suzano Papel for BRL1bn (USD295m) to support agricultural production.

APA

Climate Bonds Initiative (2018). Green Securitisation. https://www.climatebonds.net/files/documents/publications/Green-Securitisation-Unlocking-finance-for-small-scale-low-carbon-projects_2025-02-17-163147_tlok.pdf

Chicago

Climate Bonds Initiative. Green Securitisation. 2018. https://www.climatebonds.net/files/documents/publications/Green-Securitisation-Unlocking-finance-for-small-scale-low-carbon-projects_2025-02-17-163147_tlok.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Green Securitisation |date=March 2018 |url=https://www.climatebonds.net/files/documents/publications/Green-Securitisation-Unlocking-finance-for-small-scale-low-carbon-projects_2025-02-17-163147_tlok.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2018green, author = {{Climate Bonds Initiative}}, title = {{Green Securitisation}}, institution = {Climate Bonds Initiative}, year = {2018}, month = mar, url = {https://www.climatebonds.net/files/documents/publications/Green-Securitisation-Unlocking-finance-for-small-scale-low-carbon-projects_2025-02-17-163147_tlok.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }