Australian renewable energy investment has received a $150 million boost with the release of the first local "climate bond" to finance local projects.

National Australia Bank says proceeds from bond issue have been ring fenced to finance both wind and solar projects in Victoria, South Australia, Tasmania, Western Australia, New South Wales and the ACT.

The bulk of the 17 projects are already operational, while three are still under construction.

The NAB says the climate – or green – bond is the first bank-issued bond to be certified in compliance with international Climate Bonds Standards, a benchmark to assist investors prioritise investments that finance climate change solutions.

The World Bank – backed by Westpac and local institutional investors and super funds – released a $300 million issuance last year, although those funds were more focused on building renewable energy projects in developing nations.

The global green bond market has been experiencing strong growth in the past couple years.

In the first six months of 2014, green bond issuance totalled $US18.4 billion - a 67 per cent increase on 2013.

All up green bonds raised more than $US40 billion worldwide this year.

Investor Group on Climate Change chief executive Nathan Fabian said it shows the banks are getting strong signals from institutional investors wanting "low carbon" and green products.

He said that, while the bond issue is a vote of confidence in existing projects, the potential growth in the sector is dependent on the outcome of the current political debate on renewable energy.

"Investors are going to look around the world for the best products," he argued.

"It's unclear whether Australia is going to be a good destination in the medium term for low carbon and green investments."

NAB says the renewable energy assets financed by the climate bond are expected to have an installed capacity of over 1.5 gigawatts of electricity in aggregate – the equivalent of an estimated 3.9 million tonnes of avoided greenhouse gas emissions.

The bond is smaller and less liquid than a typical major bank issuance, but it reflects the fact that superannuation and institutional funds increasingly have mandates demanding a percentage of investments are "clean and green".

"This provides investors the opportunity to invest in a bond with the same features of any senior, unsecured NAB bond – but with the additional benefit of being dedicated to financing climate change solutions," said NAB group executive for product and markets Antony Cahill.