On the go: The Debt Management Office will sell £10bn in green gilts as part of £124.7bn in overall gilt sales in the 2022-23 period.
The DMO’s net financing requirement for 2022-23 is set at £147.9bn, and will be financed by gilt sales along with £23.2bn raised from net Treasury bill sales.
Green gilts are bonds issued by the government to help finance projects with environmental benefits.
The government aims to use these to support investment in areas including clean transportation, renewable energy and energy efficiency.
The green gilts will be included across the auction of 10 medium conventional gilts worth £26.5bn and 13 long conventional gilts valued at £22.5bn respectively.
So far, it is anticipated that one green gilt sale will be scheduled for each quarter. The sales will be geared towards the reopening of existing medium and long-maturity bonds.
The DMO issued its first green gilt in September 2021, which had a maturity date of July 31 2033. According to the DMO’s accounts, it raised £10bn in medium conventional green gilts for the 2021-22 period.
It was the first of two green gilt issuances in 2021-22, which aimed at raising a minimum of £15bn altogether.
The second issuance raised £6bn, according to the Treasury.
In September, XPS said it believed that index providers and fund managers were “likely to treat green gilts more or less like conventional gilts”.
“Therefore, schemes that currently invest in pooled and segregated funds with the remit to hold conventional gilts may well obtain exposure naturally through decisions of their fund manager,” the consultancy advised.
