International Financial Corp, a member of the World Bank Group, has launched a minimum $100 million Green Kauri bond sale to finance private sector investments addressing climate change in emerging markets. It is the first time a "green bond" has been launched in New Zealand.
The 10-year fixed rate bond will be issued under the IFC's global medium-term note program. The settlement date is August 9 with a maturity date of August 9, 2027. Bank of New Zealand is acting as arranger and ANZ Bank and BNZ are acting as joint lead managers on the bond, the IFC said in a statement.
"This bond is a critical step in opening up green and sustainable investing opportunities in NZ dollars," said BNZ head of debt capital markets Mike Faville. ANZ Bank's head of capital markets Dean Spicer said the move opens a "new door of opportunities" for issuers and investors in NZD bonds.
IFC will use the proceeds to support investments in renewable energy, energy efficiency and other areas that reduce greenhouse emissions, it said. IFC was one of the earliest issuers of green bonds, launching its first bond in 2008. As of July 2017, IFC has issued approximately US$6 billion (NZ$8b) in green bonds.
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"This issuance demonstrates the continued and expanding role of capital markets in mobilising international savings to help close the climate finance gap," said IFC director for treasury market operations Monish Mahurkar.