16 March 2018
Green bonds only part of the solution
Simpson Grierson partner Simon Vannini sees Auckland Council’s recent move to establish a green bond framework as
positive but only part of the overall solution to fund new infrastructure.
“With all of the recent discussion around funding for much needed infrastructure, in particular in Auckland, we’re
encouraged to see Auckland Council’s recent announcement that it has voted to establish a green bond framework,” says
“Importantly, the Council has confirmed that this was not about increasing the amount of borrowed money, but rather
looking to replace some current bonds through a refinance and changing these into green bonds.”
The law firm says it’s good to have green bonds as part of a stable of ideas for funding, however they are not convinced
this will of itself create the extra interest and demand which Auckland Council (and other regional authorities) will be
looking for to fund the infrastructure shortfall in their regions.
“In order to attract both institutional and retail investors in these types of infrastructure investments, green bonds
should be looked at as one of a range of debt funding options around financing new infrastructure - which may also
include listed bonds,” says Vannini.
“These types of bonds should be part of the solution, but with regional authorities having to deal with debt caps it is
unlikely they will be a complete answer.”