Six years since leading the New Zealand market in issuing Green Bonds, Auckland Council recently settled on its largest ever Green Bond issue, with EUR 600 million (NZ$1 billion) raised.
Auckland Council’s EUR Bonds are now supported by well over 100 different European investors and the council’s Green Bond proceeds help fund Auckland’s sustainability-focused priorities.
Auckland Council group treasurer John Bishop said the latest issue had broad support from European investors, including several large new institutions.
“Auckland Council was the first organisation in New Zealand to issue Green Bonds and, six years on, we continue to see value in this market,” says John.
“Listed on the Singapore Exchange, the EUR Green Bonds are supporting Auckland city development and are also a positive influence on our debt management, as part of an established funding strategy by Auckland Council.”
The recent issue was Auckland Council’s return to the Green Bond market after three years and council’s second European Green Bond issue.
Green Bonds highlight the diverse ways sustainable initiatives can be funded.
Funds raised through Green Bonds can only be used for projects and assets with positive environmental outcomes, such as contributing to local projects such as the City Rail Link, energy efficient buildings and cycleways.
Since 2018, Auckland Council has raised the equivalent of NZ$3.6 billion in Green Bonds. The proceeds have contributed toward the City Rail Link, funding for electric trains and the cycleway network.
“Green bonds enable us to spread investments, such as electric trains, over multiple generations. We often use debt to fund assets, and each year we do five or six debt issues to invest in capital expenditure for day-to-day infrastructure that will live on in our communities for decades.”
Since entering the market, 73 per cent of the council’s Green Bond proceeds have been invested into clean transportation, 12 per cent for sustainable water and wastewater management, and the remainder for pollution prevention, renewable energy, green buildings, energy efficiency, and sustainable natural resources and land use.
Some of the benefits include reducing emissions by nearly 22,000 tCO2e from electric trains and 2700 tCO2e from LED streetlights.
The Green Bond proceeds have also supported community recycling centres collecting unwanted items for re-use (promoting a circular economy) and the Puketutu Island project also diverted 138,000 tonnes of waste from landfill in 2023.
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What is a Green Bond?
Funds raised through Green Bonds can only be used to fund projects that will benefit the environment.
Auckland Council’s sustainable finance framework has identified the eligible sectors for investment as follows:
- renewable energy
- energy efficiency
- efficient buildings
- waste management
- sustainable land use
- low-carbon transportation
- climate change adaptation
- sustainable water management.
In addition, the Green Bond and resulting investment must obtain external assurance and proof of ongoing compliance.
Read more:
Auckland Council’s Green Bonds
Green Bonds (aucklandcouncil.govt.nz)
Auckland Council’s 2023 Green Bond Report
Annual Green Bond Report - 2023 (aucklandcouncil.govt.nz)
