Green Treasury bonds allow the interest rate to be reduced

The Public Treasury has carried out the first issuance of sovereign green bonds for an amount of €5 billion with a term of 20 years. The funds will be used to finance projects that promote the ecological transition and aimed at mitigating and adapting to climate change.

The funds, in addition to financing projects that promote the ecological transition and aimed at mitigation and adaptation to climate change, are also focused on the sustainable use and protection of water and maritime resources, the transition towards a circular economy, the prevention and control of pollution, and the protection and recovery of biodiversity and ecosystems.

The issue has registered a demand of more than €60 billion, 12 times the amount issued, and much higher than that registered for the rest of the inaugural green bond issues of other European countries.

This high demand has allowed the new reference to be issued with a coupon of one per cent and a yield of 1.034 per cent, reducing the cost of financing for the Treasury due to the green nature of the issue. In this way, the average cost of the Treasury portfolio continues to reduce, it stands at 1.65 per cent, compared to 1.85 per cent at the beginning of the year. The cost of what is issued by the Treasury in 2021 is in negative territory, at -0.01 per cent.

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