France issues first 'green bonds' with record 7 bln euro sale

January 25, 2017
The launch of France's green bond was announced in April 2016 by President Francois Hollande

France has issued its first "green bonds" with a record seven billion euro ($7.5 billion) sale, paving the way for the establishment of a genuine market in renewable energy bonds.

Proceeds from Tuesday's sale of the 22-year bonds will be used to finance projects to address climate change.

Credit Agricole-CIB, which was one of the banks handling placement of the bonds with institutional investors, said it was a "historic" event for the green bonds market because of the size and long maturity of the loan.

The move demonstrates France has "a credible and robust framework to implement the Paris Agreement (on )," Environment Minister Segolene Royal said.

The bonds' coupon was set at 1.75 percent, an interest rate comparable to conventional borrowing on the same timeframe.

The issue shows France is able to finance expenditure on green projects at the same price as traditional borrowing, Finance Minister Michel Sapin told reporters.

The initiative was first announced in April 2016 by President Francois Hollande who has championed his country's role as a leader in energy transition.

Poland was the first country to enter the green bond market with a more modest 750 million euro issue in December. Previously they had only been issued by companies or finance institutions such as the World Bank.

But because of its size and maturity, the French transaction marked the entry of states into the green bonds market, stressed Anthony Requin, CEO of Agence France Tresor, which manages French government debt.

"By becoming the first country to issue a sovereign green benchmark bond, France has confirmed its role as a driving force for the implementation of the goals of the December 2015 Paris Climate Agreement," AFT said in a statement.

The issue, which was reserved for such as banks and pension funds, was oversubscribed with total demand exceeding 23 billion euros.

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1 / 5 (5) Jan 25, 2017
Green bonds. Great news.
I guess we AGW liars have fooled every scientist on Earth. I knew we could putt it off, after seeing how easily the draft-dodging cowards previously got the American Goobers SCARED with screams of "WMD!".

Yup, we and Pootie did it, to Make America Weak Again.

At least that is what the the "poorly-educated" think.
5 / 5 (1) Jan 25, 2017
It is a tremendous waste of taxpayers' money; renewables are not helping to reduce carbon emissions, e.g. Germany.
Faux-environmentalists (fossil fuel lobbyists) are inducing French people to go in the wrong direction.
With carbon-free nuclear power, France is greener than Germany (a country heavily committed with intermittent renewables backed up by fossil fuels)
"Germany has given us an unfortunate example of how *not* to solve climate change and pollution."
5 / 5 (1) Feb 02, 2017
It is a tremendous waste of taxpayers' money;

Well, it's a bond. They have to pay it back eventually unlike subsidies which are simply yanked out of the taxpayer pocket and issued to the industry at a loss.

A bond or an investment is the right way of funding renewable energy, because it implies that the projects or where the money is spent need to be economically self-sustaining and pay themselves back. Otherwise the issuer of the bond runs out of money and can't fill the obligation.

Of course, since it's a government bond, they can still just yank the money out of taxpayer pockets when the projects fail to make ends meet.
3 / 5 (2) Feb 02, 2017
Of course, since it's a government bond, they can still just yank the money out of taxpayer pockets when the projects fail to make ends meet.

Well, you just have to look at the "great success" of SolarCity to see this.

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