AIB has issued a €1 billion green bond for the financing of low-carbon projects - the first for an Irish bank. 

AIB said the funds raised from the green bond will further strengthen its regulatory capital position and contribute to the financing of projects with clear environmental and climate change benefits. 

The bank is only the second European bank to raise supplementary capital  - Tier 2 capital - by issuing a green bond.  

Banks that issue green bonds use the funds raised to finance or re-finance eligible green projects such as renewable energy projects, low carbon offices and the construction of energy efficient homes. 

AIB's chief executive Colin Hunt said the bank's first green bond offers socially responsible investors an opportunity to support AIB as it continues to move its business towards greater environmental sustainability. 

"This transaction represents a major vote of confidence by investors who are willing to provide us with new capital because they recognise that AIB has been leading the way in the transition to a green economy, not only at an Irish level, but at European level," Mr Hunt said. 

"As the first Irish bank to successfully complete a green bond issuance we are reaffirming AIB's commitment to being a sustainable and strongly capitalised bank," he said.

"Through our actions, from our green mortgage product, to our €5 billion green lending fund, we are determined to play our part in enabling a sustainable economic recovery," the CEO added.

Finance Minister Paschal Donohoe said that AIB's green bond issuance represents another important step in supporting the country's transition to a low carbon economy.