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Feb 25, 2020

Finance Minister: Hungary is in “green bond” talks with investors in Japan and China

PM Orbán announced the launch of the green bond, which will be used to finance climate-friendly programs in the framework of a climate protection action plan, earlier in February.

The finance minister has revealed that Hungary is in talks on the issue of a three to five-year “green bond” with investors in Japan and China.

“We’re currently in talks on the green bond in two markets, in Japan and in China. There is stronger interest [in Japan] where a number of players have appeared as partners for an issue. We’ll launch this year; the framework will be established by mid-year on the basis of which we can decide the issue scale of such a security. We’re thinking of a three- to five-year maturity, and we’ll use the proceeds to finance investments that specifically protect the climate,” Mihály Varga said in an interview with mfor.hu.

Prime Minister Viktor Orbán announced the launch of the green bond, which will be used to finance climate-friendly programs in the framework of a climate protection action plan, earlier in February.

Minister Varga said the government is also weighing the possibility of making the green bond available to resident retail investors, but he said the securities would first be issued to institutional investors. He confirmed that a new government security targeted at Hungarians saving for retirement would be launched this year.

“We want to launch a kind of construction that draws [retail] investors with more favorable conditions, getting them to buy the securities sooner, at a younger age. We want to ensure favorable yields…[and] sufficient flexibility allowing savings to be topped up at any time, based on the needs of the client,” the minister said.

In regard to the term of the bond, Minister Varga said the government had “not wound up consultations on the matter of, for example, allowing access to the savings after a period of ten years, similar to the practice of pension funds, or only after the investor reaches retirement age”.

Photo credit: vg.hu