Australia plans green bond in 2024 in climate finance reversal
AUSTRALIA, one of the world’s biggest per-capita polluters, intends to start a green financing programme from the middle of next year, in the latest move by the government elected in May to end the nation’s reputation as a climate laggard.
Australia will begin the programme after developing a green bond framework and engaging with investors, Treasurer Jim Chalmers said Friday (Apr 21). The programme will be managed by the Australian Office of Financial Management, which has previously been reticent to issuing green debt.
The about-face comes as Australia undertakes a whole of economy revamp after the Labor government set a legally binding target to cut carbon dioxide emissions by 43 per cent from 2005 levels by 2030. The green financing is intended to help Australia’s progress to net-zero emissions by 2050 by boosting investment in clean-energy infrastructure, Chalmers said.
“Our Sovereign Green Bonds programme will attract more green capital to Australia, by increasing transparency around climate outcomes and the scale of green investments available,” he said. The programme will also enable “investors to back public projects driving Australia’s net-zero transformation and boosting the scale and credibility of Australia’s green finance market”.
While still a nascent sector of the global debt market, nations are increasingly turning to ESG-linked debt in a bid to get cheaper financing for their green ambitions. New Zealand, which has the highest-yielding bonds in the developed world, last year issued NZ$3 billion (S$2.5 billion) of green bonds maturing in May 2034.
The government did not specify how much it hopes to raise with the issue. It will co-fund the Australian Sustainable Finance Institute’s (ASFI) development of a finance taxonomy to ensure investments deliver on their sustainability claims, according to the statement.
“The absence of a sustainable finance taxonomy in Australia has been a significant barrier to investment in climate solutions, including clean energy,” said Kristy Graham, CEO of ASFI. “We’re pleased to be working closely with government to start the development of an Australian taxonomy which will help to channel additional capital toward the climate transition.” BLOOMBERG
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