Germany on Wednesday launched its first "green" bond offering to finance environmental initiatives as it pivots towards a sustainable economy, and could become a benchmark issuer in the booming field.

The government raised 6.5 billion euros ($7.7 billion), in the offering for the 10-year 0% bond, with investors placing orders of more than 33 billion euros, according to German finance agency.

Even at this early stage, "Germany is well on the way to becoming a benchmark issuer in the field of sustainability bonds," according to German public bank LBBW analyst Elmar Voelker.

A further bond issue is planned before the end of the year.

In August, the finance ministry said it would raise up to 11 billion euros in 2020 to support climate-related projects.

The green bonds are "twin bonds", issued alongside conventional federal bonds with a similar maturity and rate of return.

Moody's analyst Matthew Kuchtyak said the approach is "innovative" and "should help alleviate investor concerns around the liquidity of the green offerings."

Germany is looking to become a key player in eco-friendly finance and last year announced it would launch the bonds in the second half of 2020 as part of its efforts to combat climate change.

Berlin has earmarked spending of 54 billion euros to 2023 as part of a climate package that includes introducing a carbon tax to cut greenhouse gases by 55 percent by 2030 compared with 1990 levels.

"Germany is preparing for a comprehensive structural change towards a sustainable and climate-friendly economy." the agency said.

"This not only contributes to combating climate change and protecting the environment, but also increases the country's overall innovative strength and competitiveness."

Germany joins the green bond trend relatively late. Poland launched the world's first sovereign green bonds in 2016 and France, currently the world leading issuer of the instrument, in 2017.

The European Central Bank is also getting in on the act. Its chief Christine Lagarde said in July that climate protection was a top priority for the bank, after it unveiled a plan worth 1.35 trillion euros to help the European economy recover from the coronavirus pandemic.

Lagarde started at the ECB late last year with a pledge to pursue a "greener" monetary policy, raising the prospect that the bank could increase the share of climate-friendly investments in its portfolio.

Green bonds accounted for 2.85 percent of global bond issuance in 2019, or around 205 billion dollars, according to the ECB, almost half of which were issued in euros.

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