Joburg pioneers green bond

The City of Johannesburg has become the first municipality to list a green bond at the Johannesburg Securities Exchange (JSE).

The R1.46 billion bond COJGO1 was priced at 185 basis points (1.85%) above the R2023 Government Bond and will mature in 2024. Executive Mayor Mpho Parks Tau announced that the bond auction was a success and 150 percent oversubscribed.

The money raised through the bond will be used to finance green initiatives such as the Bio Gas to Energy Project and the Solar Geyser Initiative, as well as all other projects that reduce green-house emissions and contribute to a resilient and sustainable City.

"This is the first green bond to be listed in the 2013/2014 financial year and marks a historic occasion, as Joburg is the first city in the C40 Cities Climate Leadership Group to issue the Green bond," said Mayor Tau.

Mayor Tau said the listing is a further endorsement of the financial stability of the City.

"This clearly demonstrates investor confidence in the City of Johannesburg and commitment to environmental stewardship and climate change, while receiving a market related financial return. The City would like to thank all the investors that made this debut Green Bond a success."

The Green Bond will provide the City with a funding source to improve and expedite the implementation of its climate change mitigation strategy and move the City towards a low carbon infrastructure, minimal resource reliance and increased preservation of natural resources.

This is not the first bond to be pioneered by the City. The City has issued seven long dated bonds to date, making it a consistent and responsible issuer in the debt capital markets having issued a total of R8.5 billion in bonds and commercial paper totalling R6.1 billion.

"To date the City has successfully redeemed a total of R1.9 billion comprising of the COJ01, COJ03, retail bonds and partial redemption of COJ02 for R166.6 million," said Mayor Tau.