Ireland raises 3.5 billion euros in green debt amid bumper demand

DUBLIN (Reuters) - Ireland raised 3.5 billion euros ($4 billion) from the sale of a new 20-year green bond on Thursday, covering as much as half of its 2023 funding needs after it received enough orders to sell the security 10 times over.

Ireland's debt agency, which plans to raise just 7 billion to 11 billion euros this year thanks to a relatively low level of maturing debt and a large projected budget surplus, sold the new bond via a syndicate of banks at a yield of 3.106%.

Ireland raised the same amount of 10-year debt through an identical process a year ago at a yield of just 0.387%. The European Central Bank has since started raising interest rates at a record pace, leading to increased government bond yields.

Ireland's National Treasury Management Agency (NTMA), like other European debt management offices, regularly raises a chunk of funds early in the year by selling bonds through syndication.

Its mandated banks and brokers received 35 billion euros' worth of orders for Ireland's second ever sovereign green bond that followed its debut issue in late 2018.

Green bonds, which raise capital earmarked for projects with environmental benefits, now account for more than 7% of Ireland's total benchmark bonds, NTMA director of funding Dave McEvoy said in a statement.

"Today's transaction, which also provides a new 20-year benchmark bond, shows we continue to see strong investor demand for Irish sovereign debt," McEvoy said, adding that the agency has flexibility in managing its issuance over the rest of 2023.

(Reporting by Padraic Halpin; Editing by Bernadette Baum and Andrew Heavens)