The City of Moscow enters the “green bonds” market in order to finance its sustainable projects
A few months ago, Vladimir Efimov, deputy mayor of Moscow said that the Russian capital was preparing to enter the green bond market, with a first bond issue scheduled for spring 2021.
Financing sustainable projects
It is now done since the city - rated BBB- by S&P and Baa3 by Moody’s - placed its first issue of "green bonds" on the Moscow Stock Exchange (Moex) in May 2021, for an amount of 70 billion rubles (RUB), about 780 million euros.
With these proceeds, Moscow intends to finance urban transport infrastructure projects in order to reduce automobile pollution. These "green" funds will be used to increase investments in public transport : the extension of metro lines and the purchase of electric buses.
This bond issuance complies with international certifications
According to an opinion provided by the rating agency Expert RA, this bond issuance complies with the Green Bond Principles (GBP) of the International Capital Market Association (ICMA). Open to Russian and foreign investors, this issuance benefits from international certification and also meets the guidelines for the promotion of green investments in the Russian Federation, developed by VEB.RF (ex-Vnesheconombank).
In fact, Vladimir Gusakov, Managing Director of Issuer and Government Relations at the Moscow Stock Exchange, said : « I am delighted to welcome the City of Moscow, the first green bond issuer among the constituent entities of the Russian Federation, to Moscow Exchange. This is indeed an important event, highlighting the increasing importance of sustainability principles for the country’s economy. Today, 15 bond issues of seven issuers totalling more than RUB 50 billion are traded on the Moscow Exchange’s Sustainability Sector ».
Characteristics :
- ISIN : RU26074MOS0
- Amount : 70 billion rubles (RUB)
- Duration : 7 years
- Coupon : 7.38% per annum
