French government seeks green bond issuance from Caisse des Dépôts and development agency

Hollande’s statement welcomed by Climate Bonds Initiative, Vigeo-Eiris

French President François Hollande has announced that the French state will ask (‘demandera’) public banks, quasi-state fund Caisse des Dépôts, the French development agency AFD and investment banks to launch green bonds as the country intensifies its efforts to develop renewable energy.

Hollande was speaking yesterday at an annual environmental conference at the Élysée Palace in Paris where he said France would “develop the green bond market”, and as part of this ask public banks and others to issue “obligations vertes”, the French term for green bonds.

Commenting on Hollande’s green bond announcement, Fouad Benseddik, Director of Methods and Institutional Affairs at Vigeo-Eiris, the ESG research firm that also assesses green bonds, said: “We can only salute this announcement, which meets the expectations of several stakeholders. We will follow this initiative with considerable interest.”

Andrew Whiley, Communications Manager at the Climate Bonds Initiative, said: “More issuance is exactly what the green bond market needs to quickly build more depth and liquidity. French banks and insurers taking a lead will influence others to follow. This is a positive national policy direction from Hollande. We need other governments to take notice.”

It comes as Hollande has already asked the Caisse des Dépôts to allocate funds to the social economy, a move which some observers think is a way to help develop a French social impact bond market, as reported in RI yesterday.Hollande, who was the first global leader to sign up to the Paris climate deal last week in New York, also announced that energy giant EDF would close several nuclear power stations from 2018, while others will see their lives extended.

He confirmed that the country’s oldest nuclear power plant, Fessenheim, which sits near the German and Swiss borders, would be closed. France has 19 nuclear power stations comprising 58 nuclear reactors.

Speaking alongside Hollande was Environment Minister Ségolène Royal, who said a roadmap for France’s energy transition up to 2023 would be published on Wednesday, with higher objectives than initially planned.

She said the number of wind farms would double in France, while electricity obtained from solar energy would triple.

The amount of renewable energy sources used for heat production would increase by over 50%.

These plans are part of the process to meet strong emissions reduction targets in France’s wide-ranging energy and ecology transition law, that includes aims to cut France’s greenhouse gas emissions by 40% between 1990 and 2030 and divide them by four by 2050, and bring the share of renewables up to 32% of the energy mix.

In one of the world’s most comprehensive shifts to public sustainable finance data, the law also compels asset owners, fund managers and insurers to report information on how they integrate ESG into their investment processes, outline the greenhouse gas (GHG) emissions of their investments and contribute to the financing of a low carbon economy.