Canada Issues Green Bond
The Department of Finance announces that Canada has successfully issued its second green bond (10-year, CAD 4 billion), which is also the world’s first green bond to include nuclear energy.
The green bond issued this time is based on Canada’s latest Green Bond Framework, which includes nuclear energy as one of the proceeds. Canada has also become the first country in the world to include nuclear energy in green bonds.
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Canada’s Green Bond Framework
In March 2022, the Department of Finance launched the first green bond framework and issued the first green bond (7.5-year, CAD 5 billion) based on it. Since the release of the Green Bond Framework, there has been considerable discussion in global jurisdictions about whether nuclear power should be considered a green activity. The EU Taxonomy has classified nuclear power as a green activity and has set its deadline between 2040 and 2045.
In November 2023, Canada released an updated green bond framework. The biggest update to this framework is to treat nuclear energy as a type of clean energy, allowing green bond funds to be invested in nuclear energy-related facilities. The updated green bond framework has been reviewed by Sustainalytics and is in line with the International Capital Market Association (ICMA) Green Bond Principles.
Additional Information about the Green Bond
The green bond has received a AAA credit rating and has received more than CAD 7.4 billion in orders, two-thirds of which came from environmentally and socially responsible investors. Green bonds will support the development of Canada’s sustainable finance market and provide investors with high-quality ESG asset allocation opportunities.
After the bond is issued, Canada will issue a fund allocation and an impact report to investors every year. The fund allocation report will record the green projects funded by the bond funds, and the impact report will elaborate on the environmental and social impacts of these projects.
Reference:
Canada Issues Second Green Bond
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