European Commission: First #NextGenerationEU green bond to finance the sustainable recovery
The European Commission has today issued the first NextGenerationEU green bond, thus raising €12 billion to be used exclusively for green and sustainable investments across the EU.
With NextGenerationEU green bonds, the EU is set to become the world’s largest green bond issuer by far, providing a significant boost to sustainable finance markets as well as funding a greener EU recovery from the pandemic. With the strong oversubscription rate and excellent pricing conditions today’s issuance represents a promising start to the NextGenerationEU green bond programme of up to €250 billion by end-2026.
A minimum of 37% of every Recovery and Resilience Plan has to be devoted to the green transition, with many Member States striving to do more.
This is the fifth syndicated transaction since the start of the NextGenerationEU funding operations in June 2021. In addition, the Commission performed the first NextGenerationEU bond auction at the end of September. These operations have so far enabled the Commission to raise €68.5 billion in long-term funding through bonds.
In the course of 2021, the Commission expects to raise some €80 billion in bonds, to be complemented by short-term EU-Bills, as announced in the funding plan published in June 2021 and updated in September 2021.
As announced in September in its detailed issuance calendar for 2021, the Commission plans to hold one more syndicated transaction by the end of the year, in November. The Commission will also be holding auctions of both EU-Bills and bonds on a regular basis.
NextGenerationEU is a temporary recovery instrument of more than €800 billion in current prices to support Europe’s recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe.
To finance NextGenerationEU, the European Commission – on behalf of the EU – will raise from the capital markets around €800 billion between now and end-2026. This will translate into borrowing volumes of an average of roughly €150 billion per year.
In: CLEPA News, Environment & Energy