Wind turbines
25 January 2017

Success for France’s first sovereign green bond

The State’s first sovereign green bond (green OAT: Obligation assimilable du Trésor / Fungible Treasury Bond) have enabled France to borrow 7 billion euros to fund the energy transition. As well as being the largest issuance so far on the green bond market, it also has the longest maturity date and is the largest inaugural issuance in the market’s history.
Content published under the Government Cazeneuve from 2016 06th December to 2017 14th May
 
Ségolène Royal and Michel Sapin are more than satisfied with the French Treasury’s issuance of the French State’s first sovereign green bond. Over the course of this inaugural transaction, France has borrowed 7 billion euros to fund the energy transition via the green OAT, which is set to mature in 22 years. It was the largest-scale issuance with the longest maturity date ever seen on the young green bond market, as well as being the largest inaugural issuance in its history.
 
 
France is also continuing to minimise its interest expense for the years to come thanks to a 1.741% rate at issue, lower than the average 2.0% rate for the outstanding debt at 31 December 2016, for an average maturity of 7 and a half years. In addition, France has demonstrated that the energy transition can be funded without cost overruns as the conditions under which the green OATs were issued are comparable in terms of price to those for a new “classic” OAT.

 
Minister Michel Sapin
"With the success of this remarkable operation, the State has demonstrated its determination to make Paris the benchmark financial centre with regard to green funding".
Michel Sapin

 
Total demand reached the remarkable sum of over 23 billion euros, coming from a wide variety of international, European and French investors interested in French long-term debt instruments as well as the bond's innovative environmental characteristics. By participating in the operation, such investors demonstrated their confidence in France as issuer and in the robustness of its commitments in favour of the ecological and energy transition.

 
Minister Ségolène Royal
"The results of the operation show that France is recognised as a great green State, with a credible and robust framework to implement the Paris Agreement".
Ségolène Royal

 
By becoming the first State in the world to issue green bond on such a scale, France confirms its role as a driving force for implementing the aims of the Paris Agreement on Climate Change of December 2015. Having become a major actor in the green bond market, the French State can now speed up its development by providing it with liquidity and depth and help define ambitious standards in its regard in order to make Paris the benchmark financial centre for accompaniment of the ecological and energy transition.


Launch of the process for issuing the first sovereign green bond

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