COPENHAGEN- Denmark's first green bonds attracted heavy demand on Wednesday, allowing its central bank to sell 5 billion Danish crowns ($762 million) worth of the new debt, which is aimed at helping to fund the country's planned energy transition.

Known as the cradle of modern wind power technology, Denmark's efforts to fund this shift, which includes reducing greenhouse gas emissions by 70% by 2030 compared to 1990 levels, are helped by it having a Triple-A credit rating.

Of a total of 65 billion crowns worth of government bond debt expected to be issued by Denmark this year, green bonds will account for 15 billion crowns.

With total bids at auction almost five times the sold amount, the auction confirmed high investor interest in the Danish sovereign debt, which is earmarked for investments such as renewable energy subsidies and electrification of railways.

"There's been really good demand for this bond," Danske Bank's chief bond analyst, Jens Peter Sorensen, told Reuters, adding the bond's yield came in lower than expected.

The effective yield was 0.14%, a 5 basis points premium to its 'twin bond', which is Denmark's conventional 10-year bond.

The twin bond concept means a 10-year green bond is issued with the same characteristics as a country's benchmark 10-year bond, allowing an investor to switch the green bond for the more liquid conventional bond at any time, but not vice-versa.

Germany also launched the twin bond system in 2020.

"The yield on Danish government bonds is generally very low and therefore it is impressive that the yield on green bonds turns out even lower," Sydbank's chief economist Soren Kristensen said in a note.

The 10-year green bond with a zero coupon was sold with a cut-off price of 98.63. A total of 23.54 billion crowns was bid by investors, which the central bank said was the highest at an opening auction since 2008. ($1 = 6.5590 Danish crowns)

(Reporting by Nikolaj Skydsgaard; Editing by Alison Williams and Alexander Smith) ((;))