Poland awarded for green bonds

Climate Bonds Initiative organisation recently awarded Poland for issuing the so-called green bonds. The country received top prize in the category Green Bonds Pioneer. The prize was collected by Deputy Prime Minister Piotr Nowak in a ceremony that took place on the 6^th of March in London.

Green bonds are fixed-income securities designed to finance pro-environment initiatives. This financial instrument is nothing new, yet until recently there has been no state treasury that would decide on issuing them. The government of Poland made a bold move and decided to be a pioneer on the green bond market.

Minister Nowak informed the assets gathered through issuing the bonds will cover budget expenditure related to environment improvement as well as refinancing such expenses incurred in the years 2014-2016. More specifically, the funds are to finance deforestation, green energy and rail transportation projects. In general, green bonds (also called climate bonds) are meant to be a source of financing for climate change – related solutions.

Polish Ministry of Finance issued green bonds in December 2016, becoming the first-ever state issuer of this type of securities. The issued bonds were in the amount of 750 million euro, with 0.634 interest and maturity of five years. Issuing the instrument was met with much interest from the investors. Initially, the planned bond value was 500 million EUR, but government officials decided to increase it to 750 million EUR.

The move is considered a great success. In London, Minister Piotr Nowak already announced the government is going to issue more green bonds in 2017. This month, the Ministry of Finance revealed the instrument may be issued annually.

Green bonds are mainly bought by foreign investors, such as investment funds, banks, and pension funds. The largest group of buyers of the first tranche of bonds were from Germany and Austria. There are already some rumours that other European countries are going to fall into the footsteps of Poland.