Australia’s sustainable finance market achieved a major milestone with the Federal Government’s inaugural green bond issuing $7 billion.
Money raised from the bond will support Government-backed projects such as green hydrogen hubs, community batteries and clean transport, as well as programs to conserve biodiversity.
The Australian Office of Financial Management’s (AOFM) bond issue was over‑subscribed with more than $22b in bids from 105 investor institutions across Australia, Asia, Europe and North America.
Treasurer Dr Jim Chalmers says the investment will help Australia meet its sustainability goals and remain competitive in the global economy.
“The global energy transformation represents a golden opportunity for Australia and this bond is pulling more global and domestic green capital into financing that opportunity,” he says.
“Demand for the bond confirms Australia is a go‑to destination for international green capital.”
The Treasurer says the green bond will help Australia mitigate and adapt to climate change.
“The projects supported by the bond will deliver significant environmental benefits, including lowering greenhouse gas emissions, increasing Australia’s renewable energy production and bolstering our biodiversity conservation, restoration and adaptation,” he says.
Most of the investment came from domestic sources (65%). The largest offshore investors were from the United Kingdom (12%), Europe (11%) and Asia excluding Japan (8%).
Fund managers were overwhelmingly the largest type of investor (63%), followed by hedge funds (11%), banks – balance sheet (10%) and banks – trading (9%).
The joint lead managers (JLMs) for the issue were Commonwealth Bank of Australia, Deutsche Bank, National Australia Bank Limited, UBS AG – Australia Branch and Westpac Banking Corporation.
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