Monday 21 October 2019

State to auction up to €1.5bn in ‘green bonds’ to fund environmental projects

Bonds: The National Treasury Management Agency HQ. Photo: Julien Behal/PA Wire
Bonds: The National Treasury Management Agency HQ. Photo: Julien Behal/PA Wire

Shawn Pogatchnik

The National Treasury Management Agency tomorrow will auction up to €1.5bn in “green bonds” designed to finance environmentally friendly development. It will be the State’s second dip into this rapidly growing global market.

The NTMA confirmed it has hired Barclays, BofA Merrill Lynch, BNP Paribas, Danske Bank, Davy and JP Morgan to manage the auction of Sovereign Green Bonds due for redemption in 2031.

In October 2018 the NTMA’s maiden auction of €3bn in green bonds attracted more than €11bn in bids from more than 170 buyers, many of them first-time bidders on Irish debt securities.

Such bonds attract specialist foreign fund managers seeking to put their money into climate change-combatting projects worldwide.

An increasing number of nations are offering green bonds as a way to stimulate investment in environmentally positive infrastructure and services.

The United States and China last year borrowed $34bn and $31bn, respectively, via such targeted-use securities, followed by France ($14bn), Germany ($7.6bn) and the Netherlands ($7.4bn), according to the Climate Bonds Initiative.

The money to be raised tomorrow will be earmarked to finance the State's low-carbon goals within the National Development Plan.

It sets a target of spending €23bn by 2027 on water and waste management, clean transportation, sustainable management of living natural resources and land use, renewable and more efficient energy generation, and climate change adaptation projects.

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