Kingdom of Denmark to Launch First Green Bond in 2022

Posted on 12/14/2021

On January 19, 2022, the Kingdom of Denmark will open a green bond with a coupon rate of 0.00% and maturity on November 15, 2031. The opening is contingent on stable market conditions. The green bond will be opened via auction in line with the Kingdom of Denmark’s other domestic bonds. An amount equivalent to the proceeds from the issuance of green bonds will be allocated to eligible green central government expenditures that support the production of renewable energy and the green transition of the transport sector. The green bond is issued in accordance with the Kingdom of Denmark’s Green Bond Framework, which describes the principles of the green bond, including the criteria governing which expenditures are eligible to be financed by the green bond. Eligible green expenditures under the framework are evaluated and selected on the basis of the definitions and criteria in the EU classification system for sustainable economic activities (the ‘EU Taxonomy’). This reflects the ambition to follow the highest standard for green bonds and contribute to enhancing transparency in the green bond market.

The green bond will be issued as a twin bond in line with the twin bond concept introduced by Germany in 2020. This implies that the green bond will be issued with the same financial characteristics as one of the central government’s existing conventional on-the-run issues. Hence, the new 10-year green bond will have the same maturity, interest payment dates and coupon rate as the central government’s 10-year benchmark bond, 0.00% 2031 (ISIN: DK0009924102).

BNP Paribas, Danske Bank and Nordea have acted as advisors on the Kingdom of Denmark’s green bond, with Nordea as structuring adviser.

Keywords: Danmarks Nationalbank, National Bank of Denmark.

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