by Staff Writers
Paris (AFP) Jan 25, 2017
France has issued its first "green bonds" with a record seven billion euro ($7.5 billion) sale, paving the way for the establishment of a genuine market in renewable energy bonds.
Proceeds from Tuesday's sale of the 22-year bonds will be used to finance projects to address climate change.
Credit Agricole-CIB, which was one of the banks handling placement of the bonds with institutional investors, said it was a "historic" event for the green bonds market because of the size and long maturity of the loan.
The move demonstrates France has "a credible and robust framework to implement the Paris Agreement (on climate change)," Environment Minister Segolene Royal said.
The bonds' coupon was set at 1.75 percent, an interest rate comparable to conventional borrowing on the same timeframe.
The issue shows France is able to finance expenditure on green projects at the same price as traditional borrowing, Finance Minister Michel Sapin told reporters.
The initiative was first announced in April 2016 by President Francois Hollande who has championed his country's role as a leader in energy transition.
Poland was the first country to enter the green bond market with a more modest 750 million euro issue in December. Previously they had only been issued by companies or finance institutions such as the World Bank.
But because of its size and maturity, the French transaction marked the entry of states into the green bonds market, stressed Anthony Requin, CEO of Agence France Tresor, which manages French government debt.
"By becoming the first country to issue a sovereign green benchmark bond, France has confirmed its role as a driving force for the implementation of the goals of the December 2015 Paris Climate Agreement," AFT said in a statement.
The issue, which was reserved for institutional investors such as banks and pension funds, was oversubscribed with total demand exceeding 23 billion euros.
All About Solar Energy at SolarDaily.com
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2017 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement|