Sweden launched the sale of its inaugural green bond on Tuesday, two bankers at lead managers arranging the deal told Reuters, kicking off what is likely to be a busy period for environmentally friendly debt issuance by European governments.

Sweden's sale is set to raise 20 billion crowns ($2.3 billion), according to one of the bankers. It comes ahead of Germany's first ever green bond expected this week.

Sweden topped the 2020 Climate Change Protection Index rankings and Denmark, another leader in climate protection, is also working on a green issuance programme. 

Spending on green projects, which these bonds fund, has become a key focus of the coronavirus response. The European Union dedicated 30% of its recovery fund and upcoming budget to funding such projects, which analysts reckon could eventually double the size of the global green bond market.

The amount Sweden will raise is in line with an earlier estimate from the country's debt management office. The issue drew demand of over 48 billion crowns, according to one of the bankers.

Due to mature on Sept. 9, 2030, the bond was expected to price later on Tuesday, according to a previous memo sent to investors seen by Reuters. Barclays, Danske Bank, NatWest Markets, SEB and Swedbank are managing the sale.

In an investor presentation last week, Sweden's debt management office set out plans to raise up to 30.7 billion crowns from upcoming green bond issues for green projects it identified in 2019 and 2020.

Germany's inaugural green bond is expected to be launched on Wednesday after the country hired investment banks to sell the bond. 

The launch of a green bond by Germany, the euro zone's benchmark bond issuer, has been cheered by investors as it could create a pricing reference for green assets across the region.

(Reporting by Yoruk Bahceli; Editing by Dhara Ranasinghe and Susan Fenton) ((Yoruk.Bahceli@thomsonreuters.com; +44 20 7542 7571; Reuters Messaging: yoruk.bahceli@thomsonreuters.com))