Climate Finance and CleanTech

UK has issued its first ever sovereign green bond and set a record. It is a 12-year bond (gilt) of £10 billion which attracted more than £100 billion of orders, an all-time high for both UK and the global green market.

Money raised by the Green Gilt will be used to finance expenditures in clean transportation, energy efficiency, renewable energy, pollution prevention and control, living and natural resources, and climate change adaption.

UK has committed to reporting on both the environmental impact, and the important social co-benefits of green expenditures financed by Green Gilts, such as job creation, access to affordable infrastructure and socioeconomic advancement.

The bond was priced at a yield of 0.87 per cent, which was 0.025 percentage points lower than the expected price for a typical conventional bond. This “greenium”, which will save £28m for the Treasury over the life of the bond, is the largest seen so far for a sovereign green bond.

“The launch of our first green bond is a signal that the U.K. continues to be a world leader in this area,” said Chancellor of the Exchequer Rishi Sunak, who had forecast the sale would be the biggest ever. “In helping us to build back better and greener, it will also help to create jobs as we transition to net zero.”

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Climate Finance and CleanTech