The German government will issue its first so-called green bonds, borrowing on financial markets to fund projects with "a positive ecological-sustainable effect" as calls grow for climate action.

"In the second half of 2020, the German Federal Government intends to issue Green German Government securities for the first time," Berlin's Finance Agency said in a statement Thursday.

The "twin" bonds will mirror normal debt issued by the German government, with "the same maturity and coupon" (annual interest payment), the agency said.

But proceeds from the green bonds "will completely be allocated to already existing expenditures with a positive ecological-sustainable effect," it added.

The move comes as Germany has stepped up its ambitions for tackling climate change, while at the EU level negotiators this week struck a compromise deal on what spending exactly should be rubber-stamped as "green".