Monash University raises over $200 million in US market to tackle climate change

In a world first, Monash University has raised A$218 million through a climate bond issued in the US private placement market to fund further sustainable development projects across its campus network.

Monash is the first university in the world to raise funds by issuing a climate bond.

The University’s historic achievement in raising development funds in this way follows its success in 2014 when it became the first Australian tertiary institution to raise debt capital in the US private placement market. The proceeds from the University’s issue were used to construct award-winning student residential buildings at the Clayton Campus.

The climate bond was certified by the 'Climate Bond Initiative' (CBI) and a Green Bond assessment [accreditation] from Moody's Investor Services. The University structured the bond to provide the market with investment options in US and Australian dollars over 15 years, 17.5 years or 20 years.

The President and Vice-Chancellor of Monash University, Professor Margaret Gardner AO said the University’s long-term debt raising initiatives, approved by the Treasurer of the State of Victoria, have provided Monash with secure and cost effective access to development capital.

Professor Gardner said the success of the Climate Bond Initiative reflects Monash as a global University. The funds would add to the university’s transition to net zero emissions.

“As a truly international university, Monash has a responsibility to provide strong and visionary leadership on sustainable development. We want our campus network to be exemplars of environmental, social and economic best practice,” Professor Gardner said.

Monash University has an annual operating revenue of more than $2 billion and its total assets are valued at $3.7 billion.

David Pitt, Monash’s Chief Financial Officer said the University was delighted with the outcome of the financing.

“The Monash issue was very well received by the investor community reflecting the University’s high credit quality based on its standing in international markets.  This was a great collaborative effort with Commonwealth Bank Australia receiving in excess of A$900 million of investor bids for the issue,” Mr Pitt said.

Professor Gardner said Monash’s investment in sustainable development had been prioritised in the University’s new environmental, social and governance policy statement.

“Monash has a sustainability plan that will include a target date for net zero emissions to be announced next year,” Professor Gardner said.

Over the next two years, Monash University will allocate capital raised through the Climate Bond to a portfolio of projects that achieve certification in accordance with the standards of the Global Climate Bond Initiative.

Development projects at Monash to benefit from the climate bond funding will include:

  • A major new learning and teaching building targeting 5 Star Green Star Certification at the Clayton campus $180 million
  • Caulfield campus library redevelopment $43.4 million
  • Solar panel installation $6.6 million
  • External LED lighting project $3.5 million.

A requirement for issuing Climate Bonds is the capital raised must be spent on projects that achieve measurable sustainability outcomes in line with the global Net Zero Emissions by 2050 target.

The University will outline progress on the Climate Bond projects in its annual report.

Monash was advised on the financing by DTW Capital Solutions.

For more information, contact Monash Media & Communications + 61 3 9903 4840 or media@monash.edu