North Macedonia announces debut green bond issue

North Macedonia announces debut green bond issue
North Macedonia's finance ministry is seeking to develop the local capital market with new financial instruments. / bne IntelliNews
By Valentina Dimitrievska in Skopje September 27, 2023

North Macedonia's finance ministry will hold the first-ever green bond issue in the amount of €10mn on October 3, the government announced on September 27.

This is the second new financial instrument introduced by the ministry on the domestic capital market this year, diversifying the range of financial products and fostering competition.

Green bonds are specifically designed to support initiatives aimed at enhancing and safeguarding the environment, as well as financing environmental projects. Similar to the previously introduced civil bond, this is a novel addition to the domestic market.

Individuals and legal entities interested in participating can submit participation requests through their respective banks by October 2. The annual interest rate of the new bonds, with a maturity of two years, is set at 4.75%.

"The introduction of this instrument aims to cultivate the capital market in our country, thereby stimulating investment activity that will contribute to accelerated economic growth," Finance Minister Fatmir Besimi said.

Proceeds from this auction will be channeled towards the Energy Efficiency Fund within the framework of the the country's state-run Development Bank. This will provide companies with favourable financing for projects focused on environmental protection.

The introduction of the green bond in the securities market follows the successful launch of the civil bonds in July 2023, which received interest that was two and a half times higher than the published prospectus amount.

In accordance with the Capital Market Development Strategy and the Plan for Accelerated Economic Growth, additional offerings such as project bonds and development bonds, targeted at development and infrastructure projects, will be introduced to the market in the near future.

Furthermore, following the issuance of the green bond, a second civil bond is also planned.