Sovereign green bond: is there a premium for financing the green transition?

This study investigates the existence of the greenium in sovereign green bonds. Greenium is a premium that investors are willing to pay for green bonds over ordinary bonds: the reason for this choice, which is counterintuitive from an economic perspective, lies in the fact that investors may be willing to give up part of their income in order to finance projects in line with climate goals. The analysis is conduced following a consolidated literature on the estimation of greenium: applying the matching technique, each green bond is linked to a conventional bond with identical characteristics (twin bonds) or a pair of conventional bonds from which a synthetic bond with similar characteristics to the green bond is derived. The statistical significance of the greenium is tested with OLS linear regression, both for single green bonds and for the entire group, and with panel regression.