• Mon. Oct 18th, 2021

BofA Estimates That EU Will Issue Between 35 And 45 Billion In Green Bonds

ByRoger Fisher

Oct 8, 2021

Next week, the European Union will issue what will be the first green bond in its history . This placement is part of a program that will allow the EU to raise, between 2021 and 2026, up to 250,000 million euros in the market through green issues that, in turn, is part of the financing, for 800,000 million, of the fund recovery (Next Generation). See more news about green emissions in the Economist Sustainable Investment and ESG.

In this way, 30% of those 800,000 million with which the post-Covid recovery aid will be paid will be in ESG format (something that makes sense, since among the main objectives of the Next Generation is precisely to give a boost to the climate transition).

Bank of America experts point out: “Based on our estimate of annual Next Generation bond issuance between now and 2026, 30% of that amount would correspond to around 35,000 to 45,000 million euros of green debt . ” The entity makes the calculations based on the fact that the funds will stay closer to 600,000 million than the ceiling of 800,000. A range of between 35,000 and 45,000 million implies that, in one year, the EU would issue the equivalent of what all European sovereign and supranational issuers have placed so far in 2021, including the recent issuances of the Spanish Treasury (for 10,000 million ) and Italy (for 8,500).

The Community Executive presented the framework for this issue a month ago, which was verified by an external auditor, the specialized agency Vigeo Eiris (which is part of Moody’s).

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