Focus on green bonds

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A green bond is a bond issued on the market by a company or public entity to investors to enable it to finance its projects contributing to the ecological transition (renewable energies, energy efficiency, sustainable waste and water management, sustainable land use, clean transport and adaptation to climate change….)

Green bonds are an important lever for financing the ecological transition, they allow companies and public entities to finance their environmental projects.

Why Green Bonds are effective financial instruments to work on the theme of energy transition ?

Green Bonds are much more than traditional bonds. The interest of these green bonds lies in the fact that the issuer undertakes to use the funds raised to finance projects that have a positive impact on the environment.

The green bond differs from the traditional bond because of the specific information that must accompany financial investments, since the amount raised finances investments in favour of the energy and ecological transition.

The Green bond market has grown strongly in recent years. While supranational agencies and issuers were the first to issue this type of bond and are still the main market players, more and more banks and private companies are contributing to the expansion of the market.

In January 2017, France launched its first green bond, which has the particularity that the amount raised must finance investments in favour of the energy and ecological transition, This issue was a real success that allowed France to raise 7 billion euros.

Unlike what it hoped, France will not be the first country to issue a green bond, Poland having slightly outperformed it with a 750 million euro issue in December 2016. But with this much larger operation, Paris intends to make a strong impression.

OATs used by Agence France Trésor, which is responsible for placing government debt on the financial markets, will have a relatively long maturity period, corresponding to the life of the projects financed. As with traditional OATs, greens bonds will then be abundant, subject to market conditions.

The funds raised will be used to finance investments in four areas, including: the fight against climate change and pollution, the protection of diversity and adaptation to climate change.

The State has a political interest with this operation, the government wants to consolidate its position as a major actor in the energy transition, after the success of COP21 and the ratification of the Paris Agreement. But more prosaically, the government also hopes to take advantage of it, by consolidating the role of the Paris Stock Exchange in the green finance market.

In order to ensure that investors respect the specificity of these obligations, two types of controls have been planned: upstream by an independent agency and downstream by a council of experts responsible for measuring the real impact on the climate or environment of the investments made.

Sources :

http://www.lemonde.fr/idees/article/2014/09/22/financer-la-transition-energetique-grace-aux-green-bonds_4492339_3232.html

https://www.oblis.be/fr/news/2016/04/27/quel-rendement-attendre-premiere-obligation-verte-france-537478

http://www.lepoint.fr/politique/la-france-lance-le-processus-d-emission-de-sa-premiere-obligation-verte-03-01-2017-2094350_20.php

Zakia Tagzirt

Zakia TAGZIRT


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