On September 2, 2016, France announced that it would be the first country to issue national "green bonds" starting in 2017.
Green bonds generally finance environmental projects (e.g., solar and hydropower plants, wind farms, clean transportation, biodiversity conservation, climate change adaptation). The labeled green bonds market is expanding and should reach a volume of US$100 billion by the end of 2016.
Green bonds initially were issued by international public actors such as the European Investment Bank (2007) and the World Bank (2008). Lately, new actors in France—private banks, companies (e.g., EDF), and local public authorities (e.g., Région Ile de France)—have emerged, following the adoption of the Paris Green Bonds Statement during COP 21 in December 2015, in which major international investors encouraged governments to issue such bonds.
The French draft Budget Bill for 2017 includes a plan to finance green investments through the third "Program of Investments for the Future." The Program intends to dedicate an investment of €6 billion to sustainable development and green growth, once the Budget Bill is adopted at the end of the year.
An inter-ministerial task force will be set up to determine the criteria for a first issuance of national green bonds in 2017, subject to market conditions. Such criteria are expected to include issues such as the "green" nature, traceability, and reporting obligations of the financed projects. The task force should draw on existing standards such as the Green Bonds Principles and the French national EETC label ("Energy and ecological transition for the climate") designed to award investment funds that finance the green economy.
The French EETC label Criteria Guidelines, adopted in March 2016, clearly exclude nuclear and fossil fuels sectors from the EETC certification. They set criteria regarding the investment funds' contribution to the financing of energy transition and the transparency of their environmental characteristics. Similar conditions are expected for future national green bonds.
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