Renewable Energy Covered Bonds

By the Law of 22 June 2018, the Luxembourg legislator introduced renewable energy covered bonds through a modification of the relevant provisions of the Law of 5 April 1993 on the financial sector, as amended ("LFS").

Renewable energy covered bonds are a new covered bonds class in the LFS, testifying the innovative attitude which Luxembourg adopts in this area, the development of green finance being part of the diversification strategy for the financial sector and the Luxembourg economy. Hence, new opportunities for covered bond banks in Luxembourg are created.

Further, several changes strengthen the existing legal framework for the issuance of covered bonds.

Renewable energy covered bonds are covered bonds backed by loans secured by rights in rem or by charges on immovable or movable renewable energy property and by step-in rights into the material contracts of the financed project. They present a high quality standard since any material property linked to...

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