Victoria has become the first Government in Australia to issue Green Bonds and the world’s first state or federal government to issue bonds with the international Climate Bond Certification.
Green Bonds are bonds that are used to finance new and existing projects that offer climate change and environmental benefits.
Globally, the majority of green bond proceeds have been used to fund rail transportation projects and renewable energy, with a lesser investment in energy efficient buildings and other categories. In Victoria, funds will be used to finance investments in transport (78%), renewable energy (14%), water (5%) and low carbon buildings (3%).
All projects to be funded by Victoria’s Green Bonds have been verified by the Climate Bonds Initiative (CBI), a London based not-for-profit organisation. The CBI is an investor-focused not-for-profit organisation, promoting large-scale investments that will deliver a global low-carbon economy. The CBI scrutinises the investments/assets for which green bonds proceeds are to be used, and give an independent certification that the use is consistent with their standards as being ‘green’.
The Treasury Corporation of Victoria (TCV) will work closely with DTF, and other government departments, to align green bonds proceeds with investments in eligible projects.