Bonds: A Complete Clean Energy Finance Guide
Clean Energy Finance Solutions Center
This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about bonds, including best practices, case studies, design and implementation information, experts and training opportunities.
Bonds are long-term debt securities—essentially contractual promises to pay a specified amount (principal) by a specified date (maturity) with interest. Borrowers (issuers) offer bonds into the capital markets and the purchasers of these bonds act as lenders. Bonds typically are one of the more secure clean energy investment mechanisms, as bond lenders are typically in senior position vis-à-vis other investors in a project and receive payments before any other investors. When considering bonds, investors will examine the yield, credit rating, duration (tenor), and whether the bond is included within a standard index. As a low risk finance instrument, bonds can provide a steady and safe rate of return for institutional investors.