Canada's new green bond sale, supporting nuclear power, sets a groundbreaking financial precedent
Canada has embarked on a new chapter in its environmental financing with the sale of $4bn in green bonds.
This marks the country's first issuance under an amended framework that notably includes support for nuclear power projects.
As reported by BNN Bloomberg, these 10-year bonds, issued on a recent Tuesday, come with a 3.5 percent coupon, and interestingly, they yield slightly less, by half a basis point, than the Canadian government debt due in December 2033.
This innovative move positions Canada as the first sovereign nation to incorporate nuclear power finance in its green bond sales. The government, in its statement, highlighted this pioneering step.
The decision mirrors a recent development within the European Union, where lawmakers, despite being deeply divided over concerns such as waste disposal, weapons proliferation potential, and accidental radiation risks, voted to assign a sustainable label to certain nuclear projects.
Jonathan Hackett, the head of sustainable finance at the Bank of Montreal, a key underwriter of the security, expressed his insights in an interview. He anticipates that this deal will likely trigger a wave of similar issuances from both public and private entities involved in nuclear power generation.
Hackett emphasized the transaction's importance, asserting, “With the deal, we have clear recognition that nuclear power is green.”
Hackett's confidence extends to the future of green bond issuances in the nuclear sector, believing that this successful transaction will boost the confidence of potential issuers about the availability of capital for their refinancing needs.
