The Australian Government is planning to issue the first Green Treasury Bond between April and June 2024 and will shortly commence a roadshow ahead of the first issue.
The bond will mature in June 2034. The four-week roadshow will be held in Australia, the UK, Europe, and Asia.
Commonwealth Bank of Australia, Deutsche Bank, National Australia Bank Limited, UBS AG, Australia Branch, and Westpac Banking Corporation have been appointed as Joint Lead Managers (JLMs) for the issue.
The Australian Government has committed to introducing a green bond program. The program will enable investors to back public projects that drive Australia’s transition to net zero by 2050 and support environmental objectives.
Sovereign green bonds will boost the scale and credibility of Australia’s green finance market and attract more green capital to Australia by increasing transparency around climate outcomes and the volume of green investments available.
The Australian Office of Financial Management (AOFM) will issue green bonds on behalf of the Australian Government.
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The Green Bond Framework sets out the Australian Government’s key climate change and environmental priorities and outlines how green bonds will be used to finance Eligible Green Expenditures. This includes the basis for identifying, selecting, managing, and reporting on expenditures financed with green bonds.
The Framework is aligned to the International Capital Market Association (ICMA) Green Bond Principles 2021.
Commenting on the forthcoming issue Betashares Responsible Investments Director, Mr Greg Liddell, said: “We’re encouraged by the Federal Government’s eagerly awaited move to issue a Treasury Green Bond. Treasury has developed a robust green bond framework aligned with international standards that should ensure bond proceeds will be directed toward projects that genuinely contribute to sustainability objectives. For ethical and responsible investors, this will ensure capital is deployed to projects that align with their values, while also achieving an investment return.
“This issuance of a Treasury Green Bond will allow ethical and responsible investors to add exposure to 10-year Australian Treasury bonds, while also ensuring the proceeds are used in ways that align with their values. For the first time, ethical and responsible investors will be able to add this fixed income building block to their portfolio through funds like our Sustainability Leaders Diversified Bond ETF.
“Importantly, the issuance of a Treasury Green Bond will create increased global interest in Australian dollar denominated green bonds, and encourage State Governments and corporates to expand their own green bond programs.”
