WA Government raises $1.9b through 10-year green bond with funds to benefit decarbonisation, climate action

Wind farms, batteries and EV charging infrastructure will secure a $1.9 billion funding boost on the back of WA Treasury Corporation’s issuance of its first-ever ‘green’ bond.

The 10-year “use-of-proceeds” bond, which raised $1.9 billion after attracting more than $6b in bids, will effectively quarantine funding for State Government projects explicitly geared towards decarbonisation or environmentally sustainable outcomes, such as Water Corporation’s desalination plant earmarked for Alkimos and Synergy’s battery systems to be built in Kwinana and Collie.

Green bonds are an increasingly prevalent financial instrument in Australia, with Westpac and NAB among the most prolific issuers of such securities in recent years.

Victoria was the first Australian jurisdiction to issue a sovereign green bond, raising $300 million through its first in 2016, with the Federal Government to follow suit in mid-2024 after announcing in April it would introduce its own in an effort to direct private investment towards its own decarbonisation efforts.

Treasurer Rita Saffioti said the success of WA’s bond was a major milestone for the State Government.

“The green bond issue was heavily oversubscribed, highlighting the confidence investors have in our commitment to deliver projects with positive environmental outcomes and our strong financial performance,” she said.

“Investors are increasingly interested in ESG performance, and I commend the Western Australian Treasury Corporation for the extensive work to issue the green bond and build the State’s ESG credentials with investors over the last two years.”

Treasury’s first green bond carries a AAA rating from Standard & Poor’s and a Aa1 rating from Moody’s. Sustainalytics, an ESG research firm based in The Netherlands, provided a second-party opinion of the green bond framework, describing WA’s product as “credible and impactful”.