Luxembourg launches Europe’s first sustainability bond framework

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Luxembourg launches Europe’s first sustainability bond framework

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Luxembourg became the first European and AAA rated country in the world to sell a “sustainability” bond earlier this month.

Listed on the Luxembourg Stock Exchange (LGX), the world’s leading platform for green and sustainable bonds, the bond raised 1.5 billion euros ($1.77 billion) and has a 12-year maturity.

Proceeds from the issuance will be divided equally between green and social projects and include construction of green buildings, development of low-carbon transport, affordable housing, and job creation.

“The bond was very well received by the market and was oversubscribed many times,” said Pierre Gramegna, Luxembourg Minister of Finance. “This shows that the market expected a bond that supports both social and environmental projects.” 

The new bond framework aligns with earlier efforts by Luxembourg to achieve United Nations’s sustainable development goals. Last year, Luxembourg announced a national plan of ten priority areas and also drafted a climate law to cut GHG emissions by 55% by 2030. 

Luxembourg’s framework is also the first in the world to fully comply with the recommendations of the Technical Expert Group (TEG) on European taxonomy, a tool that helps investors navigate the transition to a low-carbon economy.

Written by

Rhea Mukerjee

Rhea Mukerjee is a consultant working in the areas of environment, clean energy access, and sustainability. Her recent roles include Executive Director at Sustain Labs Paris, communications Advisor at OECD, and researcher at E3G. She is driven towards making SDG 7 a reality and is passionate about the energy access and gender nexus. Prior to this, Rhea spent eight years managing public relations, corporate communication and social media for the private sector in India. She holds a Master’s in Public Affairs degree from Sciences Po, Paris where she specialized in environment and energy policy.