Green Bond framework aims at raising €250B at financial markets for post-pandemic recovery in next 5 years.
The European Commission adopted on Tuesday a green bond framework to finance a green project of the bloc’s post-pandemic recovery fund.
“It is a framework to issue up to €250 billion ($297 billion) in green bonds, which is around 30% the NextGenerationEU funds,” EU Commissioner for Budget Johannes Hahn told reporters.
“It will reinforce the investments, innovation and strategic autonomy of Europe’s economy, making (the European Union) the largest green bond issuer at the global market,” he added.
The green bonds will finance the green projects of the bloc’s post-coronavirus recovery and resilience fund.
The rules of the recovery instrument require member states to dedicate at least 37% of investments to foster green transition and climate neutrality.
The European Commission is expected to issue the first bonds as of October and to continue with the program until 2026.
In the upcoming five years, the EU executive body will borrow up to €800 billion at financial markets to provide loans and grants for member states to help relaunch the bloc’s economy after the coronavirus crisis.
After a year-long deadlock in negotiations, EU leaders and the European Parliament reached last December an agreement on the bloc’s budget of €1.8 trillion for the period of 2021-27, which includes a €750 billion temporary recovery instrument, the Next Generation EU, and the ordinary long-term budget.
In February, a special act on the Recovery and Resilience Facility, part of the Next Generation EU, was adopted by the European Parliament and member states to authorize the European Commission to raise money at the financial markets.