New Zealand local council plans to sell green bonds

Auckland Council plans to issue green bonds later this year to fund water, transport infrastructure

Auckland Council, the local government council for the Auckland region in New Zealand, plans to issue NZD green bonds later this year to fund infrastructure projects.  

In a statement, the Auckland Council said it is set to be the first such council in the country to issue green bonds. The council is also planning to establish a Green Bond framework, which are voluntary process guidelines that promote transparency and integrity of initiatives around green bond issuance.

Green Bonds are vehicles for raising funds which are invested in assets and projects which have positive environmental and sustainability impacts. This form of bonds allows Auckland Council to diversify the pool of funds available by tapping into investors who wish to fund ‘green’ infrastructure assets and projects, who otherwise might not invest in infrastructure.

“We aim to be the first council in New Zealand to set up a Green Bond framework and by tapping into new investment sources we can look to deliver projects in our city quickly from a diverse range of funds,” says Mayor Phil Goff.

Goff says the council plans to invest in water infrastructure, the clean-up of its harbours and waterways, as well as public transport infrastructure to reduce emissions and decongest roads.

“These projects are an attractive investment opportunity for investors who are allocating larger segments of their portfolios to climate change and green investment activities,” Goff says, adding that the council will need “billions of dollars” to invest in Auckland infrastructure over the coming decade.

“It makes sense to leverage the strong investor demand for green bonds to assist us with funding these projects,” he adds.

Finance and Performance Committee chair, Councillor Ross Clow, says, “Auckland’s investments in low emissions infrastructure and resilient water infrastructure projects is an opportunity for Green Bond financing”.

“These initiatives demonstrate Auckland’s commitment to sustainability and leadership in promoting the development of the Green Bond market in New Zealand.

“Additionally, we know that there is strong investor demand for Green Bonds with their global issuance projected to reach US$250bn in 2018,” Clow says.

In establishing a Green Bond framework, Auckland will join other C40 Cities Toronto, Johannesburg and Mexico City that are leading the way in green financing.

    

Date

8 Mar 2018

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