Victoria has become the first government in Australia to issue a green bond, with the Treasury Corporation of Victoria today announcing the issuance of a $300 million certified green bond.
The news was flagged last week by The Fifth Estate, when TCV general manager Victoria Justin Long revealed the plan at a Climate Bonds Initiative report launch.
The triple-A-rated bond was launched on 18 July and was fully subscribed just a day later by 17 investors that included insurance companies, funds management and investors with sustainability or socially responsible investment mandates.
The bond is expected to finance and refinance government investment in energy efficiency, renewables, public transport and water treatment. Specific projects are expected to include LED traffic light upgrades, low-carbon buildings at Federation Square, work on the Melbourne Metro and the development of large-scale renewable power stations.
National Australia Bank is the sole arranger, green bond structuring agent and lead manager for TCV on the issue.
Victorian Treasurer Tim Pallas said the government was proud to lead the country on government-issued green bonds, and said there was a growing appetite for socially responsible investment.
“We are delivering on our promise and making Victoria a leader in action on climate change – with strong renewable energy targets and now diversifying our funding source for key state investments,” Mr Pallas said.
“It’s evident by the strong market demand for these bonds, that they make economic sense – giving investors the confidence of a triple-A rated government security, with the assurance that funds will be used for ethical and environmentally friendly investments.”
Climate Bonds Initiative chief executive Sean Kidney said the government had positioned itself as a national and international leader.
“Funding for new infrastructure in public transport, clean energy and low carbon building development will all be boosted from this landmark green bond issuance, which meets international best practice in disclosure and transparency,” he said.
Mr Kidney said he hoped the issuance would spur other governments around the country, and internationally, to pursue green bonds as part of their climate finance, infrastructure and sustainability policies.