Switzerland Issues Inaugural $766 Million Green Bond
The Swiss government announced the completion of its inaugural green bond issuance, raising CHF766 million ($USD766 million) to fund expenditures supporting its environmental goals in areas including clean transportation and biodiversity.
In a statement following the issuance, the government said that it aims to regularly issue green bonds, with targeted issuance volumes of several hundred million francs per year, with green bonds becoming a specific component of Switzerland’s Confederation bonds in the future.
The offering follows the Swiss government’s announcement late last year of its intention to begin issuing green bonds, followed by the publication in August of the Swiss Confederation Green Bond Framework. The framework outlines the areas of eligible expenditure for green bond proceeds, with categories including Clean Transportation, Agriculture, Forest management, Natural landscapes and Biodiversity, Green Buildings and Energy Efficiency, Renewable Energy, International Cooperation and Research, Innovation and Awareness Raising.
In a presentation to investors by the Swiss Confederation, Federal Office for the Environment Director Katrin Schneeberger, and Federal Finance Administration Director Sabine D’Amelio-Favez outlined Switzerland’s environmental strategies and objectives, which focus on the two main challenges of climate change and biodiversity loss. Switzerland has adopted a climate strategy to reach net zero emissions by 2050, as well as an action plan to preserve biodiversity, ecosystems and genetic diversity.
The Swiss Confederation said that its has identified approximately CHF4.5 billion of green expenditures, which will be partly funded by the new green bond. According to the investor presentation, the largest green expenditure category identified is “Clean Transportation,” at over CHF3.2 billion, in areas including zero emissions rail and bus transport and infrastructure. The second largest identified category is ‘Agriculture, forestry, natural landscapes and biodiversity,’ at nearly CHF900 million.
The new green bond matures in 2038, and was issued with a yield of 1.465%. The offering was oversubscribed, generating nearly $1 billion in bids.