The green bond, referred to as COJGO1 was the first to be issued by a municipality in South Africa and will mature in 2024.
The R1.46 billion issue is priced at 185 basis points above the R2 023 government bond, which Mayor Parks Tau said was “very competitive and a reflection of the city’s improved financial position”.
“This clearly demonstrates investor confidence in the City of Johannesburg and commitment to environmental stewardship and climate change, while receiving a market-related financial return,” Tau said.
The bond would be listed on the JSE securities exchange on 9 June.
The city council issued its first municipal bond in 2004 and had redeemed R1.9 billion, including R900 million in the past 12 months.
Tau said the green bond was unlike other “general obligation bonds” because it would only finance green initiatives.
“The green bond will provide the city with a funding source to improve and expedite the implementation of its climate change mitigation strategy… a low carbon infrastructure, minimal resource reliance and increased natural resources,” said Tau.
The city council’s green programmes include the installation of 43 000 solar water heaters by City Power that will collectively save the equivalent of 22.5GW-hours of electricity a year, enough to run a small town.
“The city has mandated the environment, infrastructure and services department…and management of City Power to present proposals for a future energy mix,” said Tau.
According to Tau, the bond will fund further projects such as the installation of roof-top photovoltaic arrays, and include the greater use of gas and natural energy over electricity.
The city council has developed biogas-to-energy plants at its waste-water treatment plants.
The first of the plants was commissioned at Northern wastewater site, and a second at the Driefontein sewage works is expected to be operational later this year.
In a bid to further contribute to its green initiatives, the city council is also reviewing bylaws and tariff policies to promote water conservation and more efficient power-demand management.
