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10 November 2021 Comments (0) Other, Real Estate

Luxembourg: success for the first sustainable government bond

Green loans are increasingly popular. Investors’ interest is growing for investments incorporating social responsibility, ethics, good governance, and sustainable development. Luxembourg was a pioneer and is today reaping the benefits. 

In September 2020, the Grand Duchy was the first AAA-rated country in the world to issue a sustainable sovereign loan. The State loan, worth 1.5 billion euros, was intended to contribute to the financing (or refinancing) of projects of a sustainable nature, with a social and/or environmental impact. The Luxembourg government has now published a first report, primarily aimed at international institutional investors. 

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Green Bonds

This 1.5 billion loan will help finance some 65 projects until 2022. The investments will make it possible to avoid nearly 290,000 tonnes of CO2 emissions thanks to a modal shift in passenger transport, to produce 6.4 million m3 of biogas per year for energy production, restore and protect 8.6 hectares of natural habitat, increase the reception capacity of approximately 6,900 pupils and students, increase the capacity of hospitals by approximately 550 beds, build 1,478 affordable housing units and support 13 social inclusion projects. As a reminder, DivercityMag recently devoted an article to green loans in the construction industry. 

In the words of the Luxembourg finance minister, “the pandemic has acted as a catalyst for sustainable finance, with governments focussing on qualitative investments in the green and digital transition to build a better future.

In recent years, Luxembourg has gained momentum in the field of sustainable and circular construction, affirming its desire to play a pioneering role in the field of architectural excellence and renovation. 

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