Sharon Wrobel is a technical reporter for The Times of Israel.
Israel has finalized its first sale of 10-year dollar-denominated green bonds, raising a total of $2 billion through an external debt offering as the government commits to its goal of a zero-emission economy by 2050.
Israel is the twenty-fourth country in the world to sell green bonds, which aim to finance key environmental targets such as those set out in the National Climate Change Action Plan to reduce carbon emissions. The government aims to reduce global warming emissions through at least 27% by 2030, to a 2015 baseline, and to succeed in grid 0 by 2050.
The Finance Department said it sold $2 billion in green bonds on 95 fundamental issues above the benchmark yield on U. S. government bonds. U. S. dated U. S. The United Kingdom, Germany and the United Arab Emirates participated in the issuance of foreign bonds.
Barclays, BNP Paribas, BofA Securities and Citi acted as underwriters to the offering. The supply has sparked “strong demand” from Asian institutional investors such as Japan and Korea, the Finance Ministry said.
“The broad participation of the world’s largest institutional investors in the sale is a sign of the wonderful confidence investors have in the State of Israel and in the strength of the Israeli economy and compels us to pursue a guilty policy that will move the Israeli economy forward. Finance Minister Bezalel Smotrich said: “We will continue to work to advance the Israeli economy and ties with foreign investors. “
The “impressive demand” led through “high-quality” strategic investors, such as central banks, pension budgets and insurance companies, which have long held Israeli state securities, the ministry added.
Green bonds link capital market investors to sustainable progress and the government’s environmental goals and are meant to help promote those goals, the ministry said. Proceeds from the sale of green bonds are used to finance climate-related environmental or other projects. in spaces such as blank transport; renewable energies, adding solar power generation as well as the installation of solar panels in government buildings; desalination; composting; and the structure of zero-energy buildings.
“The State of Israel has controlled taking a vital step in financing its activities despite uncertainty in the capital markets,” said Deputy Accountant General Gil Cohen. “The factor supports the government’s debt control strategy and, in particular, the diversification of investment resources and the broadening of the investor base. “
“The effects of the factor imply confidence in the Israeli economy on the part of the world’s leading investors,” Cohen added.
The green bond sale comes after Israel in November joined a White House initiative to reduce net carbon emissions to zero by 2050 across all government operations, aiming to reduce global warming emissions and set an example to markets. Prior to the debt offering, the then-Office of the Accountant General released a framework for green bonds, which it said were meant to supply cash for new and existing projects that are sustainable and for the planet.
“The good fortune of the green bond factor reflects the credibility attributed to the Israeli government in meeting the environmental goals set by the government,” Finance Ministry accountant general Yali Rothenberg said.
Israel sold dollar-denominated bonds in foreign markets in January 2020, before the outbreak of the coronavirus pandemic, promoting 10- and 30-year bonds totaling $3 billion. In the same year, the state sold its first 100-year bonds as a component of a $5 billion bond to pay for a large stimulus package aimed at mitigating the economic damage caused by the coronavirus pandemic.
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