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Germany

Germany

KfW issues EUR 1.5bn green bond

GERMANY: The German government-owned development bank KfW has issued green bonds to aid investment in, among other things, renewable energy.

KfW is based in Frankfurt
KfW is based in Frankfurt

The EUR 1.5 billion bonds — fixed-income instruments to fund environmental projects, usually involving reducing CO2 emissions — were successfully issued, making it the largest green bond ever.

The bond proceeds are linked to KfW's environmental investment programme, which largely puts money into wind and solar PV projects. The bank said there had been "strong demand" for the bond, with the order book hitting EUR 2.6 billion.

The bond has a maturity of five years and pays an annual coupon of 0.375%. Crédit Agricole, Deutsche Bank and SEB jointly act as lead managers of the transaction.

With 90 investors taking up the offer, the average ticket size was below EUR 30 million. In May GDF Suez became the first company to issue a green bond.

The financial instrument was first developed by the World Bank and the European Investment Bank seven years ago.

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