State of Berlin issues sustainability bonds for the first time

The Berlin Senate wants to finance dozens of social and ecological projects through so-called sustainability bonds.

According to the information provided, investors can invest specifically in projects from the state budget "that create a particular social or ecological added value". Berlin is the second federal state after North Rhine-Westphalia to issue such bonds in the near future, said Finance Senator Daniel Wesener (Greens) on Wednesday. The issue volume of a first bond of this kind would be 750 million euros. "It's not just what we finance, but how we finance it," Wesener stressed.

Sustainability bonds to be issued every two years

In order to be financed by the bond, the projects must meet certain sustainability criteria that agencies and bank consortia would have defined and certified. Around three quarters of the loan will be used to finance social projects. The remaining quarter goes to environmental projects. In future, the Senate wants to issue such sustainability bonds every two years. The minimum purchase price is 1000 euros, and consumers can also invest. Many of the projects have already received budget funds from the Senate.

Environmental and social projects

The environmental projects financed through bonds include, for example, the conversion of the BVG bus fleet to e-drives as well as the mixed forest programme, with which forests are to be more strongly adapted for climate change. The social projects include free school lunches and free support for families through so-called baby guides.

Bond to start "promptly"

According to the information provided, the funds from the current sustainability bond will benefit a total of 36 projects. They correspond to twelve of the UN's 17 sustainability goals, such as gender equality, quality education or climate protection. The bond runs for ten years and will start "promptly", as Wesener said. At the moment, nothing was known about the interest rate.