Honda is looking to raise $2.75 billion by issuing U.S. dollar-denominated green bonds that will benefit its electrification push.

The move will see the automaker issue $1 billion worth of 3-year notes, $1 billion worth of 5-year notes, and $750 million worth of 10-year notes. The green bonds are expected to yield 1.12 percentage points above Treasuries.

A bond prospectus published by Honda reveals that it will allocate an amount equal to the net proceeds of the green bonds to a host of green initiatives, including the production of electric vehicles, solar and wind technologies, and into investments in the recycling of used vehicle parts.

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Honda’s move comes just a few months after Ford sold $2.5 billion of green bonds to help raise additional funds for its transition to electric vehicles.

Data from Bloomberg reveals that $513 billion worth of green bonds were sold last year and may reach as high as $1 trillion this year and upwards of $5 trillion by 2025.

In early 2021, Honda announced a plan to only sell all-electric and fuel-cell vehicles by 2040. The car manufacturers also expects battery-electric and fuel-cell vehicles to account for 40 per cent of its total North American sales by 2030 and 80 per cent by 2035. Helping Honda to achieve this goal will be a plethora of electric vehicles based on its e:Architecture platform. Honda is also working on two electric SUVs that will use GM’s Ultium batteries, one of which will be badged the Honda Prologue while the other will be an Acura.