Green bonds’ popularity on the rise in Germany

Business development banks like the KfW are an important source of funding for Germany’s energy transition and they increasingly use so-called green bonds to finance endeavours in clean energy production or e-mobility, Günter Heismann writes in the Frankfurter Allgemeine Zeitung. The green bonds’ returns are used to fund climate and environmental protection projects and are supposed “to offer investors an opportunity” to engage in these fields, which allows them to clearly trace what the money is spent on, says Michael Stölting of NRW Bank. The development bank of the federal state of North Rhine-Westphalia (NRW) says that if one million euros are invested in a green bond, this on average would save 800 tonnes of CO₂ per year over two decades - the period during which renewable energy installations receive guaranteed support in Germany. “Word has got around that sustainable assets are often very profitable,” Heismann says, adding that a visible rise in green bond emissions will likely be further boosted once the EU decides on common rules for green finance in 2019.

See the CLEW interview Germany laggard in assessing fossil investment risks - Deutsche Börse for background on green finance in the country.