Berkeley announce £400m ‘Green Bond’ Boost

Berkeley announce £400m 'Green Bond' Boost

One of the UK’s most prominent house builders, Berkeley Group has confirmed plans to issue £400 million in ten-year “Green Bonds” as part of its strategy to boost the energy efficiency of its homes.

Making the announcement, Berkeley also confirmed that the Green Bonds would be issued at an interest rate of 2.5% per year, would be used in alignment with the company’s Green Bond Framework.

Berkeley announce £400m 'Green Bond' Boost

Berkley’s Green Bond Framework is one of several components of the company’s long-term strategy – named “Our Vision 2030” – within which it intends to make significant improvements in areas like climate action, product quality, customer satisfaction and supporting nature.

According to the statement from Berkeley, the money generated by the Green Bonds will be allocated “specifically in connection with the development of green buildings (energy-efficient homes) on [the company’s] complex large-scale regeneration sites, where the Berkeley Group is transforming neglected brownfield land into flourishing, well-connected, nature-rich, low carbon neighbourhoods and communities.”

The company stated with confidence that “substantial investor interest” was generated over a series of recent meetings with prospective investors.

“We have been delighted by the strength of institutional demand for our debut issue of green bonds,” commented Berkeley’s chief financial officer, Richard Stearn.

“This demonstrates that investors recognise the resilience of Berkeley’s unique long-term operating model and, through our new Green Bond Framework, the value to the wider environment of our regeneration activities,”

“It takes many years of patient place making to stitch these vast spaces, once cut off from their local communities, back into the local fabric, and bring them to life with the right mix of homes, public amenities, parks and open spaces. This is inherently sustainable and relieves pressure on Greenfield land.”

Government’s Green Bonds Initiative Delayed to 2022

Last month, Chancellor Rishi Sunak shared detailed information on the government’s long-awaited green bonds initiative, including a delay to their introduction. Originally scheduled to be launched this summer, investors and savers interested in the scheme will now have to wait until next year.

As part of the government’s efforts to achieve net-zero emissions, green bonds will be sold in hope of raising billions of pounds for green initiatives nationwide. With many households across the UK having amassed additional savings during the pandemic, the government hopes more people will be interested in the new green bonds than similar prior initiatives.

Mr. Sunak also confirmed that the bonds issued by Treasury-backed bank National Savings and Investments will be available exclusively online.

Unlike typical green bonds that are aimed primarily or exclusively aimed at established investors, the government’s green bond scheme is designed to target everyday savers.

“We are delighted to be offering a new savings product on behalf of the Government and playing a key role in contributing towards the UK’s Green agenda,” said NS&I chief executive, Ian Ackerley.

“This exciting new Bond will be available to purchase from later this year and will give UK savers the opportunity to contribute towards green projects to help make the world greener, cleaner and more sustainable.”

Speaking at Mansion House, My Sunak expressed confidence in the initiative’s long-term potential.

“As the baton passes to a new generation of leaders in finance, I feel optimistic about the future, ambitious at home, confident internationally,” Sunak said.

“With a plan to make this country the worlds most advanced and exciting financial services hub for decades to come, creating prosperity at home and projecting our values abroad.”

The government’s green bonds will be available as a three-year fixed term investment, open to individuals aged 16 and over with a minimum investment of £100 and a maximum of £100,000.