For the first time, the state of Hesse is issuing a “green” bond to refinance ecologically valuable projects.

The goal of the state government led by the CDU and the Greens for the ten-year bond is a volume of 500 to 600 million euros.

Climate protection, environmental protection and sustainability are in the foreground when selecting the state projects to be financed, said Finance Minister Michael Boddenberg (CDU).

With the bond, which has a term of ten years, Hessen also wants to meet the increasing need of investors at home and abroad to invest their money in an ecologically sustainable way.

Ralf Euler

Editor in the Rhein-Main-Zeitung, responsible for the Rhein-Main section of the Frankfurter Allgemeine Sonntagszeitung.

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    The proceeds from the issue of the eco-bond agreed in the black-green coalition agreement are used to refinance sustainable projects from the budget years 2018 to 2020.

    According to Alexander Labermeier, head of the loan and investment department at the Ministry of Finance, 20 projects that have already been completed and billed have been selected.

    These include, for example, the conversion to environmentally friendly local public transport and the construction of cycle paths or the reforestation of the Hessian forests as part of the adaptation to climate change.

    Projects to support ecological agriculture, the renaturation of streams and other nature conservation projects, measures in the course of the Hessian climate protection plan and the increase of energy efficiency in public buildings are also eligible for funding.

    Investing in a "good feeling"

    The return that investors can hope for is approaching zero because of the ongoing low interest rate phase. Government bonds are generally less interesting because of high interest payments than because of the high level of security of the investments, said Minister Boddenberg. Ultimately, the purchase of “green” bonds is also an investment “in a good feeling”. Last year, Baden-Württemberg, ruled by a green-black coalition, was the first federal state to issue a “green bond” on the capital market. This ten-year bond has a volume of 300 million euros.