Moscow to issue first regional green bonds

Moscow to issue first regional green bonds
Moscow's borrowing ceiling for 2021 is set at RUB400bn ($5.4bn), but is unlikely that the all of the amount will be allocated to green bonds. Analysts surveyed by Vedomosti expect a 3- to 5-year issue yielding up to 7%
By bne IntelliNews March 1, 2021

Moscow will be the first Russian region to issue "green bonds" to finance ecological and environmental projects, Vedomosti daily reported on March 1 citing the capital's government.

Moscow's borrowing ceiling for 2021 is set at RUB400bn ($5.4bn), but is unlikely that the all of the amount will be allocated to green bonds. Analysts surveyed by Vedomosti expect a 3- to 5-year issue yielding up to 7%, to be bought out by large banks and investment funds focused on ESG. 

The share of green bonds could reach 60% of the total Moscow government's issuance, they believe. The demand is expected to be high, as this would be the first issue of sub-federal green bonds in Russia, as well as the solid credit ratings of Moscow.

Vedomosti reminds that the first Russian company to issue green bonds was Russian Railways with a placement of €500mn bonds yielding 2.2% in 2019.

As reported by bne IntelliNews, Russian state energy policy is focusing more and more on ESG as the country belatedly prepares to tackle the EU carbon tax introduction and other "green" challenges.

Recent reports suggest several initiatives are being developed at the same time, such as green certificates, a greenhouse gas (GHG) emission reduction strategy, and an energy efficiency policy. Major state-controlled (Rosneft) and private (Lukoil) oil and gas majors are pledging to deliver green strategies.

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