The New Zealand dollar-denominated bonds would be used to invest in environmental assets and projects
Auckland Council intends to be the first council in New Zealand to establish a Green Bond framework and to consider the issue of NZD Green Bonds later in 2018 as it looks to significantly invest in infrastructure to lower emissions and adapt to climate change.
Green Bonds are vehicles for raising funds which are invested in assets and projects which have positive environmental and sustainability impacts.
This form of bonds allows Auckland Council to diversify the pool of funds available by tapping into investors who wish to fund ‘green’ infrastructure assets and projects, who otherwise might not invest in infrastructure.
Mayor Phil Goff says: “We are investing significantly in our water infrastructure, to clean up our harbours and waterways, and in public transport infrastructure to reduce emissions and decongest our roads.
“These projects are an attractive investment opportunity for investors who are allocating larger segments of their portfolios to climate change and green investment activities”.
“We aim to be the first council in New Zealand to set up a Green Bond framework and by tapping into new investment sources we can look to deliver projects in our city quickly from a diverse range of funds.”
Goff says the city needs to invest “billions of dollars” in Auckland’s infrastructure over the coming decade.
“That includes focusing on projects which make Auckland greener and adapting to climate change.
“It makes sense to leverage the strong investor demand for green bonds to assist us with funding these projects,” the mayor argues.
Finance and Performance Committee Chair, Councillor Ross Clow, says: “Auckland’s investments in low emissions infrastructure and resilient water infrastructure projects is an opportunity for Green Bond financing.”
These initiatives demonstrate Auckland’s commitment to sustainability and leadership in promoting the development of the Green Bond market in New Zealand, Clow says.
“Additionally, we know that there is strong investor demand for Green Bonds with their global issuance projected to reach $250bn in 2018,” he adds.
In establishing a Green Bond framework, Auckland will join other C40 Cities, including Toronto, Johannesburg and Mexico City, that are leading the way in green financing.
Auckland Council’s 10-year Budget and the Auckland Plan 2050 both recognise the importance of protecting and enhancing the natural environment for Aucklanders, and the council believes this is a further step towards that goal.
No money is currently being sought and Green Bonds cannot currently be applied for under any potential offer.
If an offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013.