The Climate Awareness Bond, offers investors a unique financial instrument that combines:
1. Dedicated use of funds in sectors key to climate protection: The funds raised are earmarked for disbursement to future EIB lending projects within the fields of renewable energy and energy efficiency.
2. Participation in the performance of a new equity index with emphasis on European corporates' environmental responsibility: The return on the bond is linked to the performance of the FTSE4Good Environmental Leaders Europe 40 Index, especially created by FTSE for this transaction. The index consists of large European companies with leading environmental management practices.
3. Investor option to reduce capacity for greenhouse gas (CO2) emissions: At maturity, investors have the option - not the obligation - to use a portion of their return to buy and cancel carbon dioxide EU allowances (EUAs) in a simple and transparent way.
4. Simultaneous offering in all domestic markets of the E.U. via EIB's European Public Offering of Securities (EPOS) platform. It is the first bond to be publicly offered to investors across the 27 E.U. member countries.
The Climate Awareness Bond is issued by the European Investment Bank, the financial arm of the E.U., a borrower of the highest credit rating (Aaa/AAA/AAA).
Due in 2012, the bonds are issued in denomination of EUR 100 and pay no coupons. At maturity, investors receive the full amount of their principal (full capital protection) plus a return equal to a [75-85%] participation in the increase of the Index over the five year period. If the equity-index linked return is lower than 5%, a minimum amount of 5% will be paid once at maturity (i.e. minimum redemption of 105%).
International protection against climate change is a key priority of the European Union. Renewable energy and energy efficiency are key areas for international climate protection and the EU has committed to taking leadership in their development. EIB, as the Bank promoting European objectives, is an important and active instrument of this policy.
Product Brochure
Prospectus
Supplement Prospectus
FTSE4Good Index Brochure
Press Release