Germany launched its first “green” bond placing, which has the same coupon as conventional federal securities to sustain renewable energy and clean transport systems.
The German government announced late last year about its intention to launch the bonds in the second half of 2020 in a bid to foster the country’s fight against climate change. Through its finance ministry, the government would gather up to $13 billion in 2020 to support the “green” project.
Jörg Kukies, state secretary at the finance ministry, said:
“From now on, the German government will issue green federal bonds every year. In this way, we are creating strong momentum towards a more robust sustainable finance market.”
He added:
“Our innovative ‘twin bond’ approach is designed to attract new investors and issuers to the green bond market and thus act as a catalyst, channeling more investments into a greener economy.”
Following the announcement late last year, Germany reserved $63 billion in spending for the next three years as part of the climate project – which also includes the introduction of a carbon tax to reduce greenhouse emissions by 55% in 2030 compared to the levels decades ago.
Germany’s federal securities are among the safest globally, with profits trading on the negative side for some time now. This means that investors will have to pay for lending the government’s funds. For instance, the benchmark ten-year bond – at the moment – currently trades yields below -0.5%.
It is essential to know that the first green bond will be a ten-year Green Federal Bond – is slated for next month. It will be part of the green twin of the conventional ten-year bond issued on
