UK’s debut sovereign green bond raises record £10bn

The so-called ‘Green Gilt’, expected to help drive the progress to net zero and create jobs across the UK, was the largest debut green issuance by any sovereign

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The UK’s inaugural green government bond raised a record £10 billion for environmental projects.

The so-called “Green Gilt”, which is expected to help drive the progress to net zero and create jobs across the UK, was the largest debut green issuance by any sovereign, according to the Treasury.

Government bonds or gilts are sold to institutional investors and provide a fixed rate of return until their expiry – the UK’s inaugural green gilt is a 12-year bond, maturing on 31st July 2033.

The money raised by the green gilt will be used to finance projects such as clean transport, energy efficiency, renewable energy, pollution prevention and control, living and natural resources and climate change adaptation.

The government aims to raise £15 billion from two green gilt launches this financial year and has committed to report on both the environmental impact and the important social co-benefits of green expenditures that have been financed.

Chancellor Rishi Sunak said: “Green finance is vital in helping us to tackle the environmental challenges we face and the launch of our first green bond is a signal that the UK continues to be a world leader in this area.

“This funding will be used to finance vital green government projects across the country, including things like clean transportation, renewable energy and preserving our natural environment. In helping us to build back better and greener, it will also help to create jobs as we transition to net zero.”