Queensland is boosting investment in environmentally responsible projects through green bonds issued via the state's Treasury.
Treasurer and Minister for Trade and Investment, Curtis Pitt, said the Queensland Treasury Corporation planned to issue certified and independently verified green bonds to domestic and international investors for use on projects funded entirely or in part by the Queensland Government.
"This is great news for Queensland as QTC green bonds will assist the government's commitment to the environment and action on climate change to benefit future generations," Pitt said.
"It means Queensland will be joining an ever-growing worldwide movement in supporting the issuing of green bonds."
The list of potentially eligible projects could include:
- Renewable energy
- Energy efficiency processes and products
- Low-carbon transport - electrified rail infrastructure and cycle ways.
- Drought resilience and flood defence
- Water and wastewater treatment plants and distribution infrastructure
- Preservation of the Great Barrier Reef and other natural ecosystems
- Low-carbon building; and
- Other projects covered by new or revised climate bond sector-specific standards.
QTC chief executive Philip Noble said green bonds could be allocated to existing, new or ongoing eligible projects that had environmental benefits for Queensland.
The interest and popularity of socially responsible investments has created new opportunities for ethically conscious fixed income investors. According to Moody's Investors Service, in the three months to 30 September more than US$26 billion in green bonds were sold around the world. Moody's anticipated the total issuance for 2016 to exceed US$80 billion, which would be close to twice the US$42 billion recorded for 2015.
The Victorian Government green bond, issued on 19 July, has raised $300 million and will be used to help finance and refinance Victorian state investments in energy efficiency, renewable energy generation, low carbon public transport and energy efficient water treatment.
The Victorian Government will also be looking to issue social impact bonds that will focus on funding drug and alcohol treatment programs and transitioning young people from out of home care.
The timing of the first QTC Green Bond will depend on market conditions and QTC had indicated it would soon brief key institutional investors.