The Auckland Council’s latest annual Green Bond offer has raised $150 million.
Council Finance and Performance Committee chairman Ross Clow says it’s a good result.
“There is a growing appetite for green investment – according to Moody’s Investor Service, the Green Bond market is tipped to hit $200 billion (USD) this year – so it makes sense for us to use the opportunity to support our sustainable development targets and goals,” Clow says.
“This financing will help us fulfil the commitments we have made to improve our cycle ways and increase our provision of electric trains. A key sustainability issue is moving Aucklanders away from high-emission transport choices and freeing up our roads from congestion and we recognise that responsible investment and financing plays a key role in achieving our targets”.
Under the council’s Green Bond Framework, money raised through such offers can only be used to fund renewable energy, energy efficiency, efficient buildings, waste management, sustainable land use and low-carbon transportation.
The Green Bonds are for six years with an interest rate of 2.013% and they have a rating of AA from Standard & Poor’s and Aa2 from Moody’s. See ratings explained here.
It’s the second successful Green Bond issue by the council in just over a year. In June last year the council announced it had raised $200 million from a Green Bonds offer, which it would use to fund Auckland’s electric trains and associated public transport infrastructure.
Auckland Mayor Phil Goff said at the time that it was the council’s first foray into the Green Bonds market.
“Auckland must be an environmental leader and with billions of dollars being invested in Auckland’s infrastructure over the coming decade, we are embracing an environmentally friendly way to generate revenue and protect our environment as our city grows,” Mayor Goff said.
“We are the first council in New Zealand to issue Green Bonds. It is a clear signal that Auckland is committed to investing in low emissions technology and protecting our environment. There is clearly an appetite in the market for green investment.”
Auckland Council was awarded a Certificate of Recognition at the Climate Bonds Initiative 2019 Green Bond Pioneer Awards in London earlier this year. The certificate is awarded to issuers, regulators and service providers that have played a pivotal role in growing the Green Bond market in 2018.