KfW Bankengruppe: the world’s largest green bond in dollars

Status: 14.10.2021 12:19 pm

KfW has raised more than € 15 billion with green bonds in recent years. Now, the development bank has also issued a green dollar bond, the largest of its kind in the world.

Frankfurt-based KfW Bankengruppe has raised $ 3 billion from investors with a new green bond. According to the institute, the five-year paper is the world’s largest dollar bond to date used for environmental purposes. The newspaper had been oversubscribed several times.

With its latest green bond, KfW has reached a green refinancing volume of around € 15 billion. Together with conventional bonds, the refinancing volume has reached 76,700 million euros since the beginning of the year. That corresponds to 96 percent of the target value for this year of 75 to 80 billion euros.

Investor interest in these green bonds is huge. The European Union set several records in its premiere of broadcasts this week. With a volume of 15,000 million euros, the first green bond in the EU is the largest public bond of its kind. Investor offers amounted to a record sum of € 135 billion. With the money raised for such securities, governments and companies want to promote sustainable transport systems and reduce CO2 emissions from cars.

Five trillion euros of investment is required

Since April 2015, KfW has been promoting climate protection and resource saving measures on behalf of the Federal Ministry of the Environment by issuing green bonds. The investments required for the ecological restructuring of the country are gigantic.

According to a bank study published last week, the desired climate neutrality in Germany will require an investment volume of five trillion euros by 2050. However, these are mainly investments that are pending anyway, which must now flow towards a Sustainable use. With a view to the stricter German target of becoming climate neutral by 2045, additional investments of € 72 billion per year are required.

IT investment backlog

Furthermore, according to KfW, Germany clearly lags behind other large countries with comparable economic strength in terms of investments in information technology. To catch up with countries like France, Japan or Great Britain, annual IT investments in Germany would have to double or triple, from the last 49 billion to 100 to 150 billion.

German medium-sized companies also spend very little on the development and application of digital technologies. To keep up with this development, digitization spending in SMEs needs to increase from € 18 billion in 2019 to € 35-50 billion per year.

Vince Fernandez

"Professional food trailblazer. Devoted communicator. Friendly writer. Avid problem solver. Tv aficionado. Lifelong social media fanatic."

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