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Lux green bonds offset 290,000 tons of CO2 over past year, says gov



Pierre Gramegna, the finance minister, says a sustainability bond market is emerging in Luxembourg. Library picture: Pierre Gramegna is seen speaking at the Belux summit, 31 August 2021. Photo: Nader Ghavami

Pierre Gramegna, the finance minister, says a sustainability bond market is emerging in Luxembourg. Library picture: Pierre Gramegna is seen speaking at the Belux summit, 31 August 2021. Photo: Nader Ghavami

One year after issuing sustainability bonds, Luxembourg’s government said the proceeds are paying off.

The grand duchy’s government has issued its first report card on the EU’s first sovereign sustainability bonds.

The government issued $1.5bn worth of sustainability bonds in September 2020, with proceeds so far funding 65 projects that aim to create a positive impact.

The finance ministry reported on 6 September that: “Amongst others, these investments will notably help avoid nearly 290,000 tons of CO2 emissions as a result of a modal shift in passenger transport, produce 6.4 million cubic metres of biogas per year for energy generation, restore and protect 8.6 hectares of natural habitat, increase the student capacity by around 6,900 schoolchildren and students, increase the bed capacity in hospitals by more than 550 beds, build 1,478 affordable housing units, and support 13 social inclusion projects.”

Pierre GramegnaPierre Gramegna, the finance minister (DP), stated: “Luxembourg was the first European as well as the first AAA-rated country worldwide to issue a sustainability bond. Importantly, by issuing a bond to finance both environmental and social projects, Luxembourg sent a signal that both causes are intertwined and encourages the growth of the emerging sustainability bond market.”

Bonds issued under the framework can have “green, social or sustainability” objectives, according to Luxembourg’s finance ministry. Funded projects must comply with Luxembourg’s Sustainability Bond Framework, as well as EU and International Capital Markets Association guidelines.