June 2016

First Government Based Green Bond

The Treasury Corporation of Victoria (TCV) has broken new ground with the issue of its first certified green bond - for $300 million - making it the first green bond by an Australian government.

The AAA rated TCV bond is certified under the Climate Bonds Standard as meeting the criteria for investments in wind energy, solar power, low carbon transport, low carbon buildings, and water. The bond will contribute to funding a range of Victorian infrastructure projects including LED traffic lights, hydroelectric power stations, low-carbon buildings at Federation Square, the Melbourne Metro Tunnel, the Mernda Rail extension and the development of a large-scale renewable energy power station.

Sean Kidney, chief executive of Climate Bonds, said "Funding for new infrastructure in public transport, clean energy and low carbon building development will all be boosted by this landmark green bond issuance, which meets international best practice in disclosure and transparency. The Andrews Government is sending a positive signal to global issuers and investors on the growing role of green bonds in climate finance and funding of new green infrastructure."

"We look forward to this foundation issuance by the Andrews Government spurring other Australian states and internationally, other governments to use green bonds as part of their climate finance, infrastructure and sustainability policies."

Previous green bond issues in Australia were primarily led by three of the ‘big four' banks, with certified climate bonds issued by NAB for wind and solar in 2014, by ANZ Bank for low carbon buildings, wind and solar in 2015, and by Westpac for wind, low carbon buildings and commercial property in 2016. In April this year, FlexiGroup issued Australia's first certified green Asset Backed Security (ABS) for rooftop solar systems with support from NAB.

The Clean Energy Finance Corporation (CEFC) acted as a cornerstone investor for all four bond issuances.

The Treasury Corporation of Victoria is the central financing authority for the State of Victoria. It provides tailored loans and financing, deposits, advisory and investment services to the State and State-related entities. Its loans are funded by the issue of government-guaranteed bonds in the domestic and international financial markets and deposits received from public authorities.





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