Germany creates first green bond programme

Earlier this week, the German government announced the country’s first green bonds, to be issued in September.

Posted Thursday, August 27th 2020
Germany creates first green bond programme

The green government bonds, worth around €11 billion, would feed into key green-growth sectors such as transport, industry, innovation and IT, as well as energy, agriculture, forestry and natural landscapes.

The so-called “twin bond” has a maturity of ten years, and allows investors to swap green bonds purchased under the new programme with conventional German government bonds, making them more attractive to investors.

“The goal is to introduce a new group of bonds while simultaneously maintaining the liquidity of our conventional bonds. This ensures that the cost-effectiveness of German bond issuances is preserved,” said Jorg Kukies, state secretary of the BMF, Germany’s finance ministry.

The BMF and the BMU, the country’s finance and environment ministries, told journalists at a press conference: “Our innovative twin concept is designed to attract new investors and emitter to the green bond market and to act as a catalyst to channel more investment into a greener economy.

The bonds are aimed at accelerating the transition to an economy largely operating on renewable energy, as well as to promote research “for a more sustainable future”.

 

Germany, long seen as a latecomer in green finance, demonstrates with this new programme its efforts to bring its green market share up to scale in recent years.

 

 

 

Edited by Aude Ghespière