Canada’s new programs for green bonds that allow financing of nuclear projects have passed an early test of investor willingness to support the power source.

The sovereign and the province of Ontario sold a combined $5.5 billion (US$4.1 billion) of securities this week, the first two issues through amended frameworks for green debt that now allow the government and province to raise money to support nuclear power. Ontario-based Bruce Power, which wants to build the world’s largest nuclear power plant, said Thursday all its future bonds will be green.

The marriage of nuclear power and green finance has fostered political turmoil in some regions — the European Union’s parliament was left with deep divisions after it decided to give certain nuclear projects a sustainable label. But because borrowers sound out potential investors before launching a new type of security, these efforts to raise money through the revised programs suggest issuers expected a decent reception, said Aayush Tandon, senior credit analyst at CIBC Asset Management.

“The fact that they were able to and were confident enough to go ahead and include nuclear is, in and of itself, a reflection of the widespread acceptance,” of nuclear power as a way for countries to decarbonize and promote energy security, Tandon said in an interview.

The securities mark a shift in Canadian green finance, because both federal and provincial green bond frameworks previously excluded nuclear uses along with fossil fuels, focusing instead on sectors such as public transit. Both borrowers highlighted the new role nuclear plays in their securities.

The Canadian sovereign’s $4 billion issue Wednesday does not specify nuclear power in its use of proceeds, though the government touted the move as a commitment to nuclear development in the country. Investors snapped up the issue of 10-year debt and received more than $7.4 billion of orders, almost double the final amount. 

Ontario’s deal Thursday was a $1.5 billion security due in 2033. The funds will be used to fund rail and subway expansion projects and electric vehicle charging infrastructure, according to its website. Future financings will state clearly whether the proceeds will support nuclear projects, said Scott Blodgett, spokesperson from Ontario’s ministry of finance.

“This has become extremely important as we have added nuclear to this new framework,” he said. This clarity “gives everyone as much information as they need to make a good decision: essentially, a decision with which they can feel comfortable.”

The deals came amid a rush of demand for corporate debt in the US, with record volumes in both January and February, totalling a whopping $387 billion.

For James Scongack, chief development officer at nuclear generator Bruce Power, investor interest in green securities is informing the company’s future fundraising plans.

“With the demand we see for green bonds, we have no dobut all future bonds funding nuclear projects will be green bonds,” he said in an interview.