Israel has completed its first sale of dollar-denominated 10-year green bonds, raising a total of $2 billion through an international debt offering as the government sets out to meet its goal of a zero-emissions economy by 2050.

Israel is the 24th country around the world to sell green bonds, which are geared to fund key environmental objectives such as those set out in the national action plan on climate change to cut carbon gas emissions. The government seeks to cut global warming emissions by at least 27% by 2030, compared with a 2015 benchmark, and to reach net-zero by 2050.

The Finance Ministry said it sold $2 billion of the green bonds at 95 basis points above the benchmark yield on similar-term US government bonds. Demand amounted to about $12 billion, or six times the amount issued, as more than 200 investors in 35 countries, including the US, the UK, Germany, and the United Arab Emirates, participated in the international bond offering.

Barclays, BNP Paribas, BofA Securities and Citi acted as the underwriters of the offering. The offering drew “high demand” from Asian institutional investors such as in Japan and Korea, the Finance Ministry said.

“The broad participation of the world’s largest institutional investors in the sale is a sign of great confidence that investors have in the State of Israel and in the strength of the Israeli economy and requires us to continue a responsible policy that will move the Israeli economy forward,” said Finance Minister Bezalel Smotrich. “We will continue to work to advance the Israeli economy and maintain ties with international investors.”

The “impressive demand” was led by “high-quality” strategic investors such as central banks, pension funds, and insurance companies, which have held the securities of the State of Israel for a long time, the ministry added.

Green bonds connect investors in the capital market to the government’s sustainability and environmental goals and are earmarked to help advance these goals, the ministry said. Proceeds of the sale of the green bonds are used to support and finance climate-related or other types of environmental projects in fields such as clean transportation; renewable energy, including solar power generation as well as the installation of solar panels on government buildings; desalination; composting; and building zero-energy buildings.

“The State of Israel has managed to take a significant step in financing its activities despite the uncertainty prevailing in the capital markets,” said Senior Deputy Accountant General Gil Cohen. “The issuance supports the government’s debt management strategy, and in particular the diversification of financing sources and the expansion of the investor base.”

“The results of the issuance indicate confidence in the Israeli economy on the part of major global investors,” Cohen added.

The green bond sale comes after Israel, in November, joined a White House initiative to bring net carbon emissions down to zero by 2050 in all government activities, in an effort both to reduce global warming emissions and to set an example for markets to do the same. Ahead of the debt offering, the Accountant General’s office at the time published a framework for green bonds, which it said are geared at providing money for new and existing projects that are sustainable and beneficial for the planet.

“The success of the green bond issuance reflects the credibility attributed to the Israeli government in meeting the environmental targets set by the government,” said Finance Ministry Accountant General Yali Rothenberg.

Israel sold dollar-denominated bonds in international markets in January 2020, prior to the outbreak of the coronavirus pandemic, selling 10- and 30-year bonds for a total of $3 billion. During the same year, the state sold its first 100-year bonds in a $5 billion bond offering to help pay for a massive stimulus plan that sought to mitigate economic damage caused by the coronavirus pandemic.