Denmark will issue its first green bond in 2022.
The bond will have a coupon of 0.00 per cent and mature on 15 November 2031. The expected issuance volume will be announced in connection with the announcement of the central government’s borrowing strategy in December.
“The market for green bonds and green financing has grown significantly in recent years. I am pleased that Danmarks Nationalbank can contribute to supporting the development of the green capital market. The financial markets play an important role in the green transition and the path towards a more sustainable economy,” says Governor Signe Krogstrup.
Danmarks Nationalbank’s says an amount equivalent to the proceeds from the issuance of green bonds will be allocated to eligible green central government expenditures that support the production of renewable energy and the green transition of the transport sector. Eligible green expenditures are evaluated and selected on the basis of the definitions and criteria in the EU classification system for sustainable economic activities.
The green bond will be issued as a ‘twin bond’ in line with the twin bond concept introduced by Germany in 2020. This implies that the green bond will be issued with the same financial characteristics as one of the central government’s existing conventional on-the-run issues. Hence, the new 10-year green bond will have the same maturity, interest payment dates and coupon rate as the central government’s 10-year benchmark bond, 0.00 per cent 2031.