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.
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“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.”