Credit: State Treasury
On Wednesday 7 September 2022, Luxembourg published the second report on its inaugural sovereign sustainability bond, issued exactly two years ago.
This document, provided for by the reference framework for sustainable bonds that Luxembourg has adopted, is primarily aimed at international institutional investors and includes allocation and impact reports.
Up to 2022, the sovereign sustainability bond financed or refinanced investments worth €1.5 billion, covering at least 65 projects in seven different sectors generating positive environmental and social impacts. These investments will make it possible in particular to avoid almost 290,000 tonnes of CO2 emissions owing to a modal shift in passenger transport, to produce 6.4 million cubic metres of biogas per year for energy production, to restore and to protect 8.6 hectares of natural habitat, to increase the reception capacity of around 6,900 pupils and students, to create around 550 hospital beds, to build 1,478 affordable housing units and to support thirteen social inclusion projects.
This second sovereign sustainability bond report provides details on the allocation of €331.5 million invested over the course of 2021 as well as the impact of these investments.
The sustainable bonds committee, led by the State Treasury, has decided to allocate the proceeds of the bond to specific projects rather than to State budget lines in order to identify more clearly the allocation of revenue. According to Luxembourg's Ministry of Finance, this is also in line with Luxembourg's objective to provide maximum transparency on the projects financed.
Similar to the previous year, the alignment of the allocation and impact report with the reference framework published in September 2020 was independently assessed by Sustainalytics, a leading environmental, social and governance (ESG) rating, research and analysis company.
Luxembourg's Minister of Finance, Yuriko Backes, commented: "Luxembourg was the first European country as well as the first AAA-rated country in the world to issue a sovereign sustainability bond. In order to ensure the highest level of transparency possible, this second report on the sustainable sovereign bond includes allocation and impact reports and details project by project the main impact indicators. While the full allocation of the proceeds of the loan is planned by the end of the 2022 fiscal year, nearly three quarters of the total amount is already allocated currently".
The report is available on the State Treasury's website: https://te.public.lu/fr/finance-durable.html.
