EU Launches Largest Ever Green Bond
The European Union (EU) has raised approximately €12 billion (£10 billion) in its first-ever green bond on Tuesday, marking its first step to becoming a leader in the rapidly expanding green debt market.
According to Reuters, the 15-year green bond, due 4 February 2037, received over €135 billion of demand. This is the highest level of demand for a green bond in the government debt market on record, closely trumping the £10 billion raised by the UK government with a £100 billion order book back in September.
The EU has hired Crédit Agricole, Deutsche Bank, Bank of America Securities, Nomura and TD Securities to lead the sale, with the launch forming part of the funding for the Next Generation EU budget.
With the EU aiming to be carbon-neutral by 2050, the bond will finance projects that benefit the environment in member states. This will include clean energy, adaptation to the climate crisis, and an increased focus on energy efficiency.
Green bonds will also help the EU tackle the coronavirus and its impact on economies. 30% of the EU’s €800 billion pandemic recovery scheme will be funded by green bonds, which will provide grants and loans to member states until the end of 2026.