Today Te Tai Ōhanga – The Treasury is announcing that NZ$3 billion of New Zealand Sovereign Green Bonds were issued, giving investors the opportunity to contribute to the financing of public climate and environmental projects.
The bond issuance was announced by Treasury Secretary Caralee McLiesh who described it as a significant step towards supporting New Zealand’s transition to a low carbon economy.
“Green bonds are a way to catalyse the financing of climate change mitigation and environmental protection through the management of the Government’s balance sheet,” she said.
Launched in September, New Zealand Sovereign Green Bonds will be used to finance or refinance projects that support government climate and environmental priorities.
“The Green Bond Programme is not about new or more debt. It is about giving investors the opportunity to finance New Zealand’s high value climate and environmental projects,” Dr McLiesh said.
“The programme will help to ensure projects are well executed, as well as drive market best practice in monitoring and reporting on climate and environmental expenditure outcomes.
“Experience from other jurisdictions shows that interest in sovereign green bonds is high and can drive increases in the private green bond market.”
The programme is being managed by New Zealand Debt Management (NZDM), the part of the Treasury responsible for managing the Government’s debt and overall cash flows. The Treasury envisages ongoing issuance of green bonds and, over time, increased transparency and reporting around climate, sustainability and living standards for the entire government debt portfolio.
The bonds, which carry a coupon of 4.25%, were issued at a yield to maturity of 4.3550%. Total book size, at final price guidance, exceeded NZ$7.5 billion.
Settlement will occur on 22 November 2022.
“I would like to acknowledge the policy work and engagement with investors and agencies across government that has culminated in this milestone for the Treasury – and congratulate NZDM on today’s successful deal.”
The New Zealand Sovereign Green Bond Framework sets out the expenditure categories that New Zealand’s Green Bonds will finance, including Clean Transport, Energy Efficiency and Biodiversity, among others.
Further information on the Green Bond Programme is available at the New Zealand Debt Management website.
Treasury Communications Team
Email: [email protected]