The Bank of Nova Scotia closed its inaugural green bond offering on Thursday, following Royal Bank of Canada into a market expected to grow in the coming years.

The bank sold US$500 million of 3.5-year bail-in green bonds, a Scotiabank release said. The bonds’ fixed interest rate is 2.375% and will mature on Jan. 18, 2023.

“The global green economy is growing,” said Bob Nguyen, the bank’s head of corporate fixed income origination, global banking and markets.

“Scotiabank’s inaugural Green Bond offering will help to meet the growing demand to fund, finance, and build sustainable assets that have positive environmental benefits while matching investors’ ever-expanding appetite for green financial products.”

Scotiabank launched its green bond framework in June. RBC issued its first green bond in April.

Earlier this year, a report from DBRS Ltd. said Canada’s green bond market was likely to grow significantly. Roughly US$4.5 billion in Canadian green bonds was issued in 2018, the report said, but the first quarter of 2019 saw almost US$3 billion.

Moody’s expects global green bond issuance to grow by 20% this year to more than US$200 billion.