The German government will buy EUR 1 billion (US$1.1 billion) in green bonds that are meant for climate protection with a capital market instrument via the country’s KfW Group.
The portfolio investments are scheduled to start in this quarter. By purchasing green bonds, KfW will help finance suitable climate and environmental protection projects, for instance in the fields of resource efficiency, renewable energies, waste management, (waste) water management, biodiversity and non-polluting transport systems,” said Environment Minister Barbara Hendricks.
In addition, by getting involved as an investor, KfW intends to promote the development of the green bonds market, which it says provides “dynamic growth rates.”
KfW will work with government agencies to select projects that are” transparent” before they are financed. “In the long run, detailed and regular reports on the financed projects as well as the involvement of external experts and the publication of their opinions are set to strengthen market participants’ trust in this market segment. Along with the further development of the market, the minimum requirements will be gradually raised to meet even higher quality standards,” KfW said.
KfW also plans to support the development and establishment of sophisticated green bond market standards by way of market initiatives and by seeking direct discussions with third parties.