European Union Registers A Record $156 Billion In Orders for Debut Green Bond

The European Union has registered a record 135 billion euros ($156 billion U.S.) in orders for its first-ever green bond.

Demand for the sale of the 12 billion euros of securities maturing in 2037 has exceeded last month’s debut green bond from the United Kingdom. The transaction is the first in a 250-billion-euro program of European Union green bond sales planned for the coming years.

Demand for environmentally friendly debt instruments is so high that it commands a green premium, or "greenium," versus conventional bonds.

Proceeds of the green bond sale will be given to European Union member states for spending in areas such as energy efficiency, clean energy and climate change adaptation.

However, the rush to start the funding means the debut comes before European lawmakers and member states have actually approved the EU Commission’s green bond framework, potentially undermining its goal to make that a "gold standard" for other borrowers around the world.

The Commission said the debt will adhere to its framework where feasible, and also to widely-used principles from the International Capital Market Association.