All crazy about green bonds in Germany
Because the investors threw themselves into the first sale of green bonds in Germany. The analysis of the Financial Times
Earlier in the week, investors lined up to buy Germany's first ever green bond, as the safest borrower in the euro zone took advantage of growing interest in green investments, the FT reports.
The German Treasury has attracted more than € 30 billion in offers for up to € 6 billion of 10-year debt, in an operation seen as a key step in the development of the European green bond market that will help set a point. reference for the pricing of other green transactions.
But it has also awakened questions about this type of debt, with some investors saying it does little to incentivize governments to increase funding for environmental projects.
Green bond issuance has exploded in recent years as fund managers are on the hunt for assets related to environmental, social and governance criteria that are increasingly important to some clients. A total of $ 263 billion of this type of debt was sold last year, compared to less than $ 1 billion a decade ago, according to Moody's data.
Germany follows countries like France, Poland, Ireland and the Netherlands, which have exploited the market in recent years, and Sweden earlier this week. European politicians, including German Chancellor Angela Merkel, have stressed that funding for the recovery of Covid-19 should have a green tinge.
Berlin-based research group Jülich has estimated that Germany's plan to become carbon neutral by 2050 could cost between 1.1% and 2.8% of gross domestic product per year. – underlining the massive level of funding the transition is likely to require.
Germany's green bond program will involve an issue of up to € 12 billion this year, over a range of maturities from two to 30 years. The Ministry of Finance outlined € 12.7 billion of qualifying spending from last year's budget, which covers everything from building new cycle paths to research into renewable energy.
However, this spending is not necessarily conditional on issuing green debt.
Sabine Maudererer, a member of the Bundesbank's executive committee, said it was important that green bonds encourage the financing of new projects, as well as finance the previous year's budget.
"The new Green Bund is already promoting a political debate on green projects – here I see things are changing," he said. "The signaling effect of these new bonds will be important, but the major shift needs to be made in the real economy."
(Extract from the foreign review by Epr Comunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/tutti-i-pazzi-per-i-green-bond-in-germania/ on Sat, 05 Sep 2020 05:51:10 +0000.