Ontario is about to become the first Canadian government to issue green bonds, with a $500 million offering expected to be released in the next few weeks.
“Green bonds will help Ontario finance transit and other environmentally-friendly infrastructure projects across the province, supporting job creation and strengthening the economy,” states a provincial government news release. Kroft and Birk report that the offering will initially be directed to institutional investors, and will fund Toronto’s Eglinton Crosstown light rail project.
“The Government of Ontario is relying on investors to buy the bonds out of a desire to curb climate change and help the environment,” they write. “According to Ontario Minister of Finance Charles Sousa, there is pent-up demand among investors for green bonds and sustainable investment opportunities, which will enable his government to pay lower interest rates as compared to other types of bonds.”