Green Bonds Overview

Green Bonds Checklist

Types of Green Bonds



Labeling, Certification, Verification, Standards



Sovereign green bonds are issued by national governments. They can be denominated in local currency or foreign currency (such as Euros, Dollars, Pounds).

The steps to issue a sovereign green bond are described in the Climate Bonds Initiative publication, Sovereign Green Bond Briefing. The Briefing discusses the nuances of national governments issuing green bonds and identifies and describes seven (7) steps to issuing a sovereign green bond, including:

1. Engaging governmental stakeholders

2. Establishing a green bond framework

3. Identifying eligible green budget items

4. Arranging an independent review

5. Issuing the green bond

6. Monitoring and reporting

7. Repeating

Some recent examples of sovereign bonds include:

  • The Dutch government (April 2019)

  • The Dutch government announced it will be issuing a sovereign green bond for up to USD 6 billion. The funds will be used for a variety of climate friendly projects, including renewable energy, energy efficiency, clean transport and climate change adaptation. The deal has been certified by the Climate Bonds Initiative and received a second party opinion from Sustainalytics confirming that it aligns with the Green Bond Principles.

  • Fiji (October 2017)

  • Fiji is the first developing country to issue a sovereign green bond and also the first amongst the island states; issuing a two-tranche FJD 100 million green bond at the end of 2017 that includes expenditures such as tax exemptions, tax credits, and subsidies. Eligible expenditures can relate to tangible assets such as land, power plants, and other infrastructure as well as research and innovation. Systainalytics provided a second opinion that found Fiji’s Green Bond Framework to be credible, transparent and aligned with the 2017 Green Bond Principles.

  • Nigeria (December 2017)

  • As the first African nation to issue a sovereign green bond, Nigeria issued a NGN10.69 billion green bond that allocates proceeds that projects that promote the transition to a low-emission economy and climate resilient growth. Eligible categories include energy efficiency, resource efficiency, improved electricity grid, renewable energy and clean technology, and sustainable forest management. The bond underwent an independent review. This bond is also the first sovereign green bond to be Climate Bonds Certified, as verified by DNV GL.

  • Poland (December 2016)

  • Driven by demand from investors for more diversification, Poland’s Ministry of Finance issued a EUR 750 million that includes expenditures such as budget allocations (including excise tax exemptions), projects, and subsidies which support further investment from the private sector in the Green Bond Principles-aligned sectors of renewable energy, clean transportation, sustainable agriculture operations, afforestation, national parks, and reclamation of heaps. Systainalytics provided a second-party opinion on the framework, finding the framework to be robust, credible and transparent that will result in clear positive environmental impacts.

  • Indonesia (March 2018)

  • The Government of Indonesia issued $1.25 billion world’s first green Sukuk (Islamic Bond), demonstrating its commitment in climate change and sustainable development goals achievement. The proceeds from the green sukuk issued by the Ministry of Finance (MoF) were dedicated to finance green projects (in line with national strategies on mitigation, adaptation and biodiversity). This was divided 49% to finance green projects from 2018 budget and 51% to refinance projects from 2016 budget.

For more examples of sovereign green bonds that have been issued, click here.

Additional resources on sovereign green bonds

  • The International Finance Corporation prepared a guide for sovereign green bond issuance, including detailed descriptions of the steps to issue a bond. Find it here.

Sub-national Green Bonds: Municipal, City, Etc.

Sub-national bonds are loans investors make to local governments. They are issued by cities, states, provinces, counties, or other sub-national governments or government agencies.

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Some recent examples of sub-national green bonds include:

  • DC Water (July 2014)

  • In the process of financing the Clean Rivers project, the District of Columbia Water and Sewer Authority (DC Water) issued the first green municipal bond for water investments in the U.S. market, totaling USD 350M. The deal was met with such great enthusiasm by socially responsible investors interested in diversification, that the deal was oversubscribed multiple times. Vigeo provided an independent, second opinion of the green bond framework.

  • City of Cape Town (November 2017)

  • The City of Cape Town issued Africa’s first municipal green bond totaling ZAR 1 billion to fund sustainability projects throughout the city including procurement of electric buses, energy efficiency in buildings, water management projects, wastewater treatment projects, and coastal rehabilitation and protection. The bond was accredited by the Climate Bonds Initiative as compliant with its core use of proceeds criteria; Moody’s also awarded the bond the highest rating achievable for a green bond.

  • City of Santa Fe (February 2019)

  • The City of Santa Fe, New Mexico recently issued a USD 13.5M green bond in order to fund the city’s new eco-friendly water system. There were USD 52M of bids for the issuance, with investors citing the Green Bond status as the reason for bidding. The bond is certified by the Climate Bond Initiative.

  • City of Reykjavik (January 2019)

  • The City of Reykjavik issued a USD 33M green bond that will fund buildings, transport, waste management, land use and agriculture, and adaptation and resilience projects. According to the issuer, 70-100% of the first issuance will be used to refinance recent eligible projects from 2016-2017. The green bond received a second party opinion from CICERO.

Additional resources on sub-national green bonds