On 24 January 2017, Agence France Trésor launched the first French sovereign green bond, the Green OAT 1.75% 25 June 2039 for an issuance amount of €7bn.By becoming the first country in the world to issue a sovereign green benchmark bond, France confirmed its role as a driving force for the implementation of the goals of the December 2015 Paris Climate Agreement.
France's Green OAT funds central government budget expenditure and expenditure under the “Invest for the Future” programme to fight climate change, adapt to climate change, protect biodiversity and fight pollution.
The funds raised are handled like funds from a conventional OAT and managed in compliance with the general budget rule. However, they are matched to an equivalent amount of Eligible Green Expenditure and the aggregate of such expenditure in a given year sets the limit for Green OAT issuance.
AFT has regularly taped the Green OAT since the initial issuance to maintain its liquidity, as it does for conventional benchmark OATs. Consequently, the outstanding amount of the Green OAT has been increased by successive tap issues. The proceeds from tap issues are also matched to Eligible Green Expenditure, as the cumulative amount of such expenditure has rised over the years (see Green OAT fact sheet).
France provides several types of report to investors: an annual report on allocation and performance indicators and a report on ex post impacts at an appropriate frequency. The ex-post impact reporting is reviewed by an independent Council.