23.10.2020   12:16

Green and social bonds increasingly used to finance rail projects

Infrastructure companies will increasingly use special tools to attract investment in order to finance projects with an environmental and social component.

This was the conclusion reached by the participants of the panel discussion Green Finance and Sustainable Development, which took place within the framework of the International Transport and Logistics Forum PRO//Movement 1520 on 22 October 2020.

In particular, Yan Tavrovsky, the President of the bank J.P. Morgan in Russia, said that the global green finance market had grown 25 times over the past 6 years.

“Last year, this market reached almost $ 300 billion. This year, despite the pandemic, it is already approaching that figure. This is a large market, with a large volume of placements, and more and more banks, funds and management companies are declaring that they are falling in line with this trend,” said Tavrovsky.

In turn, Andrei Soloviev, head of the Debt Capital Markets Department at VTB Capital, noted that about 15% of the assets of European funds are now aimed at green bonds. It is estimated that this figure will reach 50% by 2023.

According to Tatyana Orlova, Head of the Corporate Finance Department at Russian Railways, the Company is a pioneer on the green finance market in Russia. However, despite the obvious environmental friendliness of the railways, a lot of work has been done to obtain the international certificates required to issue the Company’s own green bonds.

Orlova stressed that Russian Railways was now preparing a list of the Company’s green and social projects that meet international requirements.

“In September we issued the next tranche of bonds and certified it. All in all, Russian Railways has issues three green bonds: for 500 million euros, 250 million Swiss francs and 100 billion roubles. Part of the funds from these placements will be used for refinancing. It seems to me that this measure will increase the volume of transactions and solve the problem of companies that do not have enough of their own projects to enter this market,” said Orlova.