Investors queued up to buy the UK’s inaugural green gilt on Tuesday in London, raising £10bn ($13.7bn) in the highest ever government bond sale.
The Treasury said the 12-year bond will help drive progress to net zero and create jobs across the UK.
The sale had the largest ever order book for a sovereign green transaction and will be followed by a second issuance later in the year.
Green Gilts will raise a minimum of £15bn for green government projects like zero-emissions buses, offshore wind, and schemes to decarbonise homes and buildings in this financial year.
The UK follows many other European nations into the green bonds market. Earlier this month Spain launched a €5bn ($5.86bn, £4.3bn) bond sale. Austria was also due to raise €1.61bn from bonds due 2031 and 2037, and Germany re-opened inflation-linked bonds due 2030 and 2046 to raise €700m.
“Green finance is vital in helping us to tackle the environmental challenges we face, and the launch of our first green bond is a signal that the UK continues to be a world leader in this area,” said UK chancellor Rishi Sunak.
Government bonds, or gilts, are sold to institutional investors and provide a fixed rate of return until their expiry. The UK’s inaugural Green Gilt is a 12-year bond, maturing on 31 July 2033.
And in a first among comparable sovereign issuers, the 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.
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The Green Gilt will be followed later in the year by the world’s first standalone retail Green Savings Bonds, issued by NS&I.
These two products will give UK investors and savers the opportunity to join the collective fight against climate change while creating green jobs across the country.
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