Navigation and service

8 November 2019

Green bonds: the Bund’s new eco-friend­ly twin

German Finance Minister Olaf Scholz has announced plans to issue green bonds – federal bonds for environmental purposes. In future, green bonds will be issued alongside conventional federal bonds, with the same maturity and coupon. Scholz believes that this will help Germany to become a leading centre for sustainable finance.

Coins up close with green background

Starting next year, we want to issue bonds that will finance only sustainable projects, including climate-friendly ones. They will have the same coupon rates as conventional federal bonds, but will be eco-friendly. Olaf Scholz, Finance Minister

The German government is adding a new product to its range of federal bonds. German finance minister Olaf Scholz has announced plans to issue federal bonds that will exclusively finance green projects. These green bonds will also help Germany become a leading centre for sustainable finance, which is one of the aims set out in the Climate Action Programme 2030.

Green bonds will be “twin bonds”, issued alongside conventional federal bonds (Bunds) with the same maturity and coupon. They will eventually be issued at all standard maturities, with the aim of appealing to longer-term investors, such as pension funds and insurance companies, as well as those on the short-term end of the spectrum, such as central banks. Scholz stated that this would enable Germany to become the benchmark issuer of green bonds on the euromarket.

The German finance minister also expects Germany’s green bonds to inject fresh momentum into the sustainable bond market overall. He believes that the positive developments seen in this area in recent years will continue to accelerate, and that more capital will be mobilised for sustainable purposes.