COVID-19 created a shock that households, businesses, economies and governments around the world are still recovering from. Looking beyond the health and economic impacts, one of the legacies from COVID has been a substantial increase in public debt levels around the world with global government debt eclipsing levels seen during WWII to be the highest on record. In Queensland, the Government’s strong health and economic response has minimised the impact on public finances in comparison to other jurisdictions.

As the State’s central financing authority tasked with funding the Queensland Government’s borrowing requirement, QTC has seen competitive market conditions with a substantial increase in semi-government issuance being driven by significant increases in the borrowing programs of many other State’s in Australia.

Accessing markets when competition is high from not only governments, but also banks and corporates, is extremely challenging. This is especially the case when movements in bond yields are volatile as we have seen to date in 2021. Backdrops such as these requires issuers to diversify their funding sources to obtain the most cost-effective funding possible.

QTC has focused on a diversified funding strategy for many years, which put us in a strong position leading into the current market conditions. Going forward, we need to continue working to attract a diverse investor base, both onshore and offshore and respond to changing investor mandates.

Building on my recommendations last year, we need to continue to equip our State to attract the growing investor base that is incorporating ESG factors in their investment frameworks. QTC was an early adopter in this area, bringing our first green bond to market in 2017 and we have since sought to further diversify our funding sources by building a green bond curve. The proceeds from these bonds have been allocated against eligible assets and projects that have an environmental benefit associated with the State of Queensland such as rail, water and solar assets.

Through QTC, Queensland is now a leader in this space and is currently one of the largest Australian green bond issuers, with approximately $7 billion raised. In September, we issued the largest green bond in the Australian dollar market and the volume and pricing that we achieved shows the strong demand from investors for QTC green bonds.

The Queensland Government has continued to respond to growth in the green bond market by supporting the expansion of QTC’s Green Bond eligible project and asset pool. The eligible project and asset pool has a mix of low-carbon transport, renewable energy and water infrastructure assets and is currently estimated at approximately $16.8 billion.

With increasing global investor demand for Queensland’s sustainable investment opportunities, we need to continue to look for opportunities across the State for projects and infrastructure initiatives that could be included in QTC’s eligible project and asset pool to support future issuance of green bonds and continue to attract this growing investor segment.