France has issued its first green bonds with a record seven billion euro ($7.5 billion) sale, becoming the second country to do so, after Poland. This move aims to pave the way for the establishment of a genuine market in renewable energy bonds.
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 climate change),” 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.
