France has issued its first “green bonds” with record USD 7.5 billion or 7 billion euro sale.
This has marked the way for establishing a genuine market in renewable energy bonds.
Money from the sale of the 22 year bonds will finance projects for addressing climate change.
Credit Agricole CIB was one of many banks handling the placement of these bonds with institutional investors.
This marks a historic event for the bonds market on account of the size and long period of loan maturity.
Move also proves France has a credible, robust framework to implement the Paris Agreement on climate change.
Bond coupons were set at 1.75 percent. This marks an interest rate comparable to conventional borrowing on the same time frame.
Issue also shows France is able to finance expenditure on green projects at the same price as traditional borrowing.
The initiative was announced in April 2016 by President Francois Hollande. He championed his country's role as a leader in energy transition.
The first country to enter the green bond market was Poland with a 750 million euro issue in December 2016.
Before this, green bonds had been issued by companies or finance institutions like World Bank.
On account of its size and maturity, the French transaction marks the entry of states into the green bonds market.
France has also become the first country to issue a sovereign green benchmark bond.
Issue was reserved for institutional investors such as banks and pension funds.
It was oversubscribed with total demand exceeding 23 billion euros.
Meanwhile the European Environment Agency has said the continent is facing rising sea levels and extreme weather due to climate change.
Copenhagen-based agency indicated assessments are on the latest trends and projections on climate change and impact across the EU.
EU body also said that the climate change will impact ecosystems, economy and human health.
European Environment Agency: Know More- Formed: 30 October 1993
- Jurisdiction: European Union
- Headquarters: Copenhagen, Denmark
- Executive Director: Hans Bruyninckx
- Management Chairperson: Elisabeth Freytag-Rigler
- Website: www.eea.europa.eu
