Accountants at the City of Johannesburg offices will be celebrating tonight, as word comes in from the JSE that the auction of “Green Bonds” to raise funds for investment in low carbon initiatives around the town has been a success for the city. The bond was released onto the market yesterday and raised R1.46billion with a market value significantly ahead of other government bonds.
Mayor Parks Tau is particularly pleased with the launch, as it is the first investment bond of its type – where funds are ring-fenced for projects such as solar geysers and biogas – to float on the JSE. According to Tau, the initial offering was over subscribed by 150%.
The City of Joburg Green Bond is set to mature in 10 years time.
While the reception among investors and press has been generally warm, financial website Business Day is less impressed. “The ability to rack [debt] up appears to be the city’s leading competence, as opposed, unfortunately, to collecting,” says an editorial lead written today, citing problems with service delivery and written off accounts over recent months.[Image – Johannesburg Stock Exchange in 1893. Wikicommons]