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 proceeds are managed in compliance with the general budget rule and finance an equivalent amount of Eligible Green Expenditure. In practice, the proceeds of the Green OAT are managed like those of a conventional OAT, but the allocations to Eligible Green Expenditure are tracked and reported.
AFT will tap the Green OAT after the initial issuance to maintain its liquidity, as it does for conventional benchmark OATs. Consequently, the outstanding amount of the Green OAT will be increased by successive tap issues. The proceeds from tap issues will also be matched to Eligible Green Expenditure, as the cumulative amount of such expenditure rises over the coming years.
France has committed to provide three reports to investors: an annual report on allocation, an annual report on performance indicators and a report on ex post impacts at an appropriate frequency. The ex-post impact reporting will be reviewed by an independent Council, which held its first meeting on 11 December 2017.
Download the 2017 Green OAT allocation and output report (2.3 Mo)
Download the overview of the 2017 Green OAT allocation and performance report (1.6 Mo)
Second party opinion on the sustainability of the French Republic’s Green OAT
Update of the second party opinion on the sustainability of the French Republic’s Green OAT
Additional background
Green bonds fund projects that have a positive environmental impact. They differ from conventional bonds in that they carry precise and specific reporting requirements on the investments they fund and their “green” credentials, although the financial risk is the same for investors.
In line with the objectives set by President Hollande at the Fourth Environmental Conference in April 2016, and with the press release published in September 2016 by the Minister for the Environment, Energy and Oceans, on one hand, and the Minister for the Economy and Finance, on the other, Agence France Trésor (AFT) announced on Tuesday 3 January 2017 that it is about to start roadshows leading up to the first sovereign green bond being issued in 2017, under the auspices of Ministers Ségolène Royal and Michel Sapin.
Press releases:
23 January 2017: Creation of the Green OAT
24 January 2017: Launch of the green OAT 1.75% 25 June 2039
19 December 2017: IFR offers a triple crown to France’s Green OAT
24 January 2018: Green OAT: Announcement of the amount of Eligible Green Expenditure for 2018
21 March 2018 : France's Green OAT wins award from Climate Bonds Initiative
20 June 2018 : Release of 2017 Green OAT allocation and output report
25 June 2018 : Announcement: Syndicated tap issue of the Green OAT 1.75% 25 June 2039
26 June 2018 : Results: Syndicated tap issue of the Green OAT 1.75% 25 June 2039
06 September 2018 : Agence France Trésor rewarded again by Euromoney/Global Capital