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Green Treasury Bonds

The Australian Government has introduced a green bond program, enabling investors to back public projects that drive Australia’s transition to net zero by 2050 and support environmental objectives.

Sovereign green bonds will boost the scale and credibility of Australia’s green finance market and attract more green capital to Australia by increasing transparency around climate outcomes and the volume of green investments available.

The Australian Office of Financial Management (AOFM) issues green bonds on behalf of the Australian Government.

The first Green Treasury Bond

The AOFM issued the inaugural 4.25% 21 June 2034 Green Treasury Bond on 4 June 2024. 

The bond was priced at a yield to maturity of 4.295%. The bond attracted strong demand from investors with a final order book of $22.89 billion, more than 3 times the $7 billion transaction size.

The bond issue was well supported by both domestic and offshore investors with around 35% allocated to offshore investors. 105 institutional investors were allocated bonds, of which 15 were new to AOFM syndicated deals.

Green Bonds Investor by type June 2024Green Bonds Investor by Geography June 2024

 

Commonwealth Bank of Australia; Deutsche Bank; National Australia Bank Limited; UBS AG, Australia Branch; and Westpac Banking Corporation were  the Joint Lead Managers (JLMs) for the issue.

Green Bond Deal Roadshow

The AOFM undertook a roadshow ahead of the first issue of the Green Treasury Bond. The roadshow ran from Thursday 11 April to Friday 10 May 2024. 

The roadshow included in-person and virtual meetings with investors, and presentations to groups of investors. 

Meetings were arranged by the JLMs for the Green Treasury Bond issue. 

The four-week roadshow was held in Australia, the UK, Europe, and Asia. Meetings with investors based in North America and other locations were held virtually.

The AOFM used two teams to conduct the meetings. The roadshow itinerary was as follows:

Team 1 

11 - 12 April: Sydney 
15 - 18 April: London 
19 - 26 April: Europe

Team 2

11 - 12 April: Sydney 
15 - 17 April: Melbourne, Brisbane
18 - 22 April: Singapore
23 - 24 April: Japan

The following two weeks (Monday 29 April to Friday 10 May) were used for virtual meetings. 

Read the Green Treasury Bond Investor Presentation.

Green Treasury Bond Video Series 

A series of short videos about Australia’s Green Treasury Bonds is available on our Green Treasury Bond Video Series page. 

The videos will be available for a limited time.

Green Bond Framework

The Green Bond Framework sets out the Australian Government’s key climate change and environmental priorities and outlines how green bonds finance Eligible Green Expenditures. This includes the basis for identifying, selecting, managing, and reporting on expenditures financed with green bonds.

The Framework is aligned to the International Capital Market Association (ICMA) Green Bond Principles 2021.

Sustainalytics, an independent sustainability expert, has provided a Second-Party Opinion on the Framework’s environmental credentials and confirmed that it is credible and impactful and aligns with the four core components of the Green Bond Principles 2021.

Eligible Green Expenditures 

All Eligible Green Expenditures must align strongly with one or more of the Australian Government’s three key Green Goals:

  • Climate change mitigation
  • Climate change adaptation
  • Improved environmental outcomes.

The interdepartmental Green Bond Committee will endorse the Eligible Green Expenditures to be financed by Green Treasury Bonds. Not all of the Government’s spending on programs with climate change and environmental objectives will be financed by Green Treasury Bonds. 

Excluded projects

In recognition of the Government’s priorities and market expectations, projects in the following sectors are excluded from consideration as Eligible Green Expenditures: 

  • nuclear energy 
  • arms and ammunition manufacturing and chemical weapons 
  • manufacture, production or sale of alcohol, tobacco, and other recreational drugs 
  • manufacture or retail sale and distribution of any products and services that are prohibited by any commitments under an international convention or treaty instrument to which Australia is a signatory
  • gambling 
  • development, refining and transportation of fossil fuels, as well as programs that predominately assist Australia’s highest greenhouse gas emitting facilities. 

Allocation and impact reporting

The Australian Government is committed to providing investors with regular and transparent allocation and impact reporting. Allocation Reporting will detail the allocation of green bond proceeds towards eligible green expenditures. Impact Reporting will detail the environmental impact of those expenditures.

Annual allocation and impact reporting will commence in 2025 and will be published on the AOFM website.

Information Memorandum

The Information Memorandum for Treasury Bonds provides detailed information about Green Treasury Bonds (and other Treasury Bonds) including the terms and conditions of their issue.

Exchange-traded Green Treasury Bonds

Exchange-traded bonds offer a convenient and readily accessible way for retail investors to access Australian Government Bonds.

Exchange-traded Green Treasury Bonds are expected to be available in 2025.


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