• Canada plans to issue its third green bond this week, following strong investor demand for previous issuances.
• The bond is part of Canada’s broader strategy to meet its 2030 emissions reduction targets and achieve net-zero emissions by 2050.
• Canada remains the first sovereign issuer to include nuclear expenditures in green bonds, reinforcing its leadership in clean energy financing.

The Government of Canada is set to issue its third Canadian-dollar-denominated green bond this week, subject to market conditions. This follows a $4 billion issuance in February 2024, which was reopened in October 2024 for an additional $2 billion. Investor demand for these bonds has been high, with final order books exceeding $11 billion.

Why it matters:

Canada’s green bond program is designed to mobilize private financing for sustainable projects, such as clean energy, infrastructure, and nature conservation. The program also strengthens Canada’s sustainable finance market and supports global climate initiatives.

Related Article: Canada Issues Inaugural $5 Billion Green Bond

Government’s stance:

“The Government of Canada’s green bonds will meet demand from investors seeking green investment opportunities backed by Canada’s AAA credit rating, while contributing to the development of a stronger sustainable finance market in Canada.”

Green Bond Framework:

• Canada updated its Green Bond Framework in November 2023 to include certain nuclear expenditures, reinforcing its commitment to nuclear power as a clean energy source.
• The framework aligns with international best practices and is recognized by ESG research group Sustainalytics as a credible plan to deliver environmental benefits.
• Other countries issuing sovereign green bonds include France, Germany, Sweden, Spain, Italy, and the UK.

Bigger picture:

The issuance aligns with Canada’s long-term strategy to reduce emissions and achieve net-zero by 2050. Green bonds play a crucial role in funding initiatives that drive clean growth and create sustainable jobs.

What’s next:

The upcoming bond will be the second of two transactions planned for the 2024-25 fiscal year. As Canada continues to expand its green finance initiatives, investors can expect more opportunities to participate in sustainable projects with strong financial backing.

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