Bonn faces considerable financing requirements in order to make the city climate-resilient and liveable. The administration is therefore bringing two innovative approaches to political consultation: a feasibility study on a natural capital fund for regional open space enhancement and the intention to issue sustainable green bonds to finance urban investments.
"Climate protection and climate adaptation not only need good ideas, but also viable financing concepts," says Mayor Katja Dörner. "With the Natural Capital Fund and the green bonds, we are testing innovative ways to finance our climate targets reliably and over the long term. I am delighted that there is a high level of interest in both concepts from the business community, the financial sector and foundations. Our goal is to develop concrete projects that can be implemented quickly in Bonn and the region."
City Treasurer Michael Fark explains: "The Natural Capital Fund and Green Bonds complement each other perfectly: while the fund is intended to channel private money into the enhancement of previously undervalued open spaces, Green Bonds give us direct access to the capital market and can thus combine our strategic sustainability goals with the financing of investment projects."
Natural capital fund - Investing in resilience through local nature
A natural capital fund will measure and price improvements in CO2 sequestration, water retention and biodiversity on private and urban land and sell them to companies. This could create financial incentives for landowners to enhance the ecological value of their land. The concept has been developed in an intensive dialog over the past few months and worked out together with numerous market participants.
As part of a feasibility study, the next step is to test the concept on pilot areas in cooperation with the Regional Natural Capital Association and examine the legal, technical and market feasibility requirements. The study is scheduled to run for three years and will be financed with up to 100,000 euros per year. The administration also proposes to support private investments in the ecological improvement of areas with up to 100,000 euros per year from the Bonn Climate Plan.
Sparkasse Köln-Bonn is involved as a potential financing partner. "A natural capital fund is an innovative step towards bringing together ecological responsibility and economic rationality. In times of increasing climate risks, we need instruments that channel private investment into natural resilience," emphasizes Ulrich Voigt, Chairman of the Sparkasse Management Board. "This is why we are working with the Natural Capital Fund team to examine the opportunities for a financing partnership. It is right and important that the city of Bonn is taking bold steps here and wants to test partnerships for strategic adaptation to new market and climate realities."
Green bonds - financing climate protection on the capital market
At the same time, the administration intends for Bonn to place a green bond on the capital market for the first time in 2026. External certification is required to confirm the sustainable nature of the investment measures and the associated objectives. The aim is to attract new investors in particular and to obtain attractive conditions on the capital market with a strengthened sustainability profile. The aim is to achieve a volume of around 100 to 150 million euros. Upfront costs of around 120,000 euros are incurred for support with the framework, placement on the capital market and confirmation of the sustainability of the projects to be financed by a lead bank. However, these costs are more than compensated for by the interest rate advantage over a conventional promissory bill.
Bonn Climate Plan 2035
The costs of issuing a green bond are financed from the budget of the Bonn Climate Plan 2035. The concept for the natural capital fund emerged from the climate fund profile of the climate plan.
The Climate Plan was adopted by the City Council in March 2023 as a roadmap for a climate-neutral and liveable city of Bonn. As a climate neutrality strategy, the climate plan defines targets and development paths for the period up to 2035 and contains a "climate protection work program" for the city administration, which will be implemented and continuously updated. Further information on Bonn's climate plan can be found at www.bonn.de/klimaplan (opens in a new tab).