Victoria Issues World First: Government Based Certified Green Bond: AUD 300m / USD 225m: Climate Bonds Certified Multisector Green Bond from Australia

Victoria Issues World First: Government Based Green Bond: AUD 300m / USD 225m: Climate Bonds Certified Multisector Green Bond from Australia

 

The State of Victoria takes big green step

The Treasury Corporation of Victoria (TCV) has broken new ground amongst governments with the issue of its first green bond for AUD 300m (USD 225m). TCV is the central financing authority for the State of Victoria, Australia’s second most populous state.

 

First government-issued bonds in the world to receive Climate Bonds Certification.

The AAA rated TCV bond is certified under the Climate Bonds Standard, meeting the sector specific criteria for investments in Wind Energy, Solar Power, Low Carbon Transport, Low Carbon Buildings and Water. The bond will contribute to funding a range of Victorian infrastructure projects incorporating these features.

Independent verification has been provided by global firm DNV GLNAB acted as Sole Arranger and Lead Manager for TCV on the issue.

 

Strong Investor Demand

The Australian Financial Review reports 17 institutional investors (including insurance companies and funds management firms) signed up, including some with a specific green or socially responsible investment (SRI) mandate.

Climate Bonds understands award winning Australian pension/superannuation fund LGSSuper, a long term leader in sustainability, is amongst the investors.

 

Who’s saying what?

Tim Pallas, Treasurer, State of Victoria

“The Andrews Government is proud to lead the country with our Green Bonds initiative, with increasing appetite across Australia and the rest of the world for socially responsible investment opportunities.”

“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.”

“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.”

 

Sean Kidney, CEO, Climate Bonds:  

"The Victorian Government has now positioned itself as a national and international leader with the issuing of its first certified climate bond through TCV.” 

"Funding for new infrastructure in public transport, clean energy and low carbon building development will all be boosted by this landmark green bond issuance, which meets international best practice in disclosure and transparency. “

“The Andrews Government is sending a positive signal to global issuers and investors on the growing role of green bonds in climate finance and funding of new green infrastructure.”

 

 

Who else has issued green bonds in Australia?

Previous green bond issuance in Australia has primarily been led by three of the ‘big four’ Australian banks, with certified climate bonds issued by NAB for wind & solar in 2014, ANZ Bank for low carbon buildings, wind & solar in 2015, and Westpac for wind, low carbon buildings and commercial property in 2016.

More recently, FlexiGroup issued Australia’s inaugural certified green Asset Backed Security (ABS) for rooftop solar systems in April 2016 with support from NAB. The domestic Clean Energy Finance Corporation (CEFC) has acted as a cornerstone investor on several of the bond issuances.

 

The Last Word

We look forward to this foundation issuance by the Andrews Government spurring other Australian states and internationally, other governments to use green bonds as part of their climate finance, infrastructure and sustainability policies.

Congratulations! Victoria leads the nation on green finance.

Check out this lovely 50 second video clip talking up Victoria, climate action and green bonds.

 

N.B. TCV have a large portfolio of projects that they will, over time, issue green bonds to fund. This factsheet details projects in that whole portfolio beyond the projects specifically earmarked to the July 2016 AUD 300m certified bond issuance. For example, hydropower projects are included in this longer term portfolio and will be funded in future issuances. The Climate Bonds Standard Hydropower Criteria are still under development. More information here.

 

Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.

The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.