According to a statement released by the Turkish Treasury on Thursday, it has successfully raised $2.5 billion in a green bond issue maturing in 2030, with a coupon rate of 9.125% and a yield
to investors of 9.3%. The bond was oversubscribed, attracting an order book of over three times the actual issue size.
The statement further noted that the bond issue saw 31% of the total sold to investors in the UK, 18% to investors in the US, 16% in the Middle East, and 15% in other European countries.
The Turkish Treasury had mandated four major banks, namely Bank of America, ING, J.P. Morgan, and Standard Chartered, for the green bond issue, which is part of its 2023 external financing program.
Including the latest issue, Turkey has raised $7.5 billion from the international capital markets this year.
A green bond is a type of debt security that is used to fund environmentally friendly projects. Investors who purchase green bonds are not only making a financial investment but also supporting projects with environmental benefits. These projects may include renewable energy development, waste management, clean transportation, and other sustainable initiatives.
This move by Turkey to issue a green bond is a positive sign that the country is taking steps to address environmental issues and combat climate change. It also reflects growing investor demand for investments that align with environmental, social, and governance (ESG) principles.
Green bonds are becoming increasingly popular around the world, with the global green bond market experiencing significant growth in recent years. According to the Climate Bonds Initiative, a non-profit organization that promotes investment in the low-carbon economy, global green bond issuance reached a record $269.5 billion in 2021, up from $118 billion in 2017.
Furthermore, the issuance of green bonds by emerging market countries like Turkey is a positive sign for sustainable finance. It demonstrates that emerging markets are recognizing the importance of sustainable finance, and investors are increasingly looking for opportunities to invest in sustainable projects in these markets.
In summary, the successful issuance of Turkey's green bond is a positive step towards supporting environmentally friendly projects and reflects the country's commitment to addressing environmental issues. It also demonstrates the growing demand for sustainable finance and the potential for emerging market countries to access the global green bond market. Photo by Metuboy, Wikimedia commons.