The Government of Canada announced that it has completed the issuance of a C$4 billion green bond, the country’s second, and the first by a sovereign issuer to include nuclear energy expenditures as an eligible use for proceeds.

The new offering follows the release late last year by the government of its updated Green Bond Framework, which added some nuclear energy expenditures in the list of eligible investment areas. The classification of nuclear energy as a sustainable activity has proved controversial in some jurisdictions, with some member states in Europe, for example, opposing its inclusion in the EU’s sustainable finance taxonomy. Despite the opposition, however, nuclear energy activities succeeded in being included in the EU Taxonomy, and is poised to be included in the UK’s taxonomy as well.

Canada issued its inaugural green bond in 2022, raising C$5 billion to help finance the country’s investments in green infrastructure and other climate and environmental protection-related projects. In its most recent green bond allocation report, the government reported that more than a third of the proceeds were directed towards investments in clean transportation, including projects supporting the adoption of zero-emission vehicles (ZEVs) and ZEV infrastructure deployment. Other top allocation categories included “Living Natural Resources and Land Use,” with funding to support sustainable farming practices and to encourage the development of innovative technologies that will reduce GHG emissions in the agricultural sector, and “Renewable Energy.”

The new offering was nearly 2x oversubscribed, with a final order book above $7.4 billion, with environmentally and socially responsible investors representing around two thirds of buyers, and institutional investors accounting for over 33% of the investor base.