Sustainable Finance

Canada Commits to $5 Billion Inaugural Green Bond

Published on: 25 March 2022 07:17 PM
by KnowESG

The Government of Canada has recently announced the issue of its inaugural 7.5-year, $5 billion green bond. The recent transaction satisfies the Government's commitment to issue a $5 billion green bond within the fiscal year.

A healthy environment and a healthy economy go side by side. The new issue plays a significant role in funding the government's investment in green infrastructure and other renewable projects, which will help fight the climate crisis and protect and preserve the environment. The bonds are also expected to create new jobs across the country.

The green bond received massive interest from investors across different spectrums, particularly environmentally and socially responsible investors represented a majority of buyers, 72 per cent. International investors made up over 45 per cent of the investor base. The final order book of over $ 11 billion set a record high for a Canadian dollar green bond offering.

Steven Guilbeault, Minister of Environment and Climate Change said: "Canada’s green bonds are a major step in our plan to grow the sustainable finance market in Canada. Green bonds allow investors to take advantage of the many emerging green market opportunities by adding climate-friendly products to their portfolios. Expanding private sector investments through a sustainable finance market in Canada is key to achieving a cleaner, net-zero economy.”

Chrystia Freeland, Deputy Prime Minister and Minister of Finance said: "The global economy is turning swiftly, decisively, and irreversibly green. It is essential for the prosperity of the next generation of Canadians–and indeed, for those of us working today–for Canada to be at the forefront of this great transformation, and sustainable finance is central to this objective. The strong demand for this inaugural green bond issuance–the first of many issuances to come–is a sign of Canada’s future as a sustainable finance leader. As we continue our government’s record investments in climate action, leveraging private investment will help us meet Canada’s 2030 emissions reduction target and achieve net-zero emissions by 2050.”