Germany to issue first ‘green bond’ in second half of 2020
Germany will launch its first “green bond” with a multi-billion euro issue in the second half of next year, to tap into the booming market for sustainable finance, the government’s finance agency said on Thursday.
“The German Federal Government intends to support the development of sustainable financial markets and in particular the green market segment by issuing Green German Government securities,” the finance agency said.
Tammo Diemer, the agency’s managing director, said it would be a multi-billion euro issue, and put the amount, in billions, somewhere between a high-single digit to low double-digit.
More details will be published in the quarterly updates of the agency’s issuance plans, Diemer added.
The “green bond”, which is part of the government’s efforts to roll over maturing debt, will be designed in the form of so-called green twin bonds.
This means that the government will issue “green bonds” with the same maturity and coupon as conventional securities, the agency said. The green twin bonds will replace part of the conventional twin bond’s auction volume, the agency said.
“In accordance with the established Green Bond Principles, the proceeds from Green German Government securities will completely be allocated to already existing expenditures with a positive ecological-sustainable effect,” it added.
The move follows an agreement that was reached by European Union member states earlier this month on a new set of rules governing which financial products can be called “green” and “sustainable”.
Under the agreement, all financial products that claim to be green or sustainable will have to disclose exactly what proportion of their investments are environmentally friendly.
Overall, the German government plans to borrow more money in 2020 than it did this year.
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