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The European Commission is borrowing in the international capital markets on behalf of the European Union. Its largest programme is NextGenerationEU, whose objective is to support Europe’s recovery from the coronavirus pandemic.

Under the NextGenerationEU green bonds programme, expenditures are being confirmed as eligible for funding via green bonds ex-post, after EU countries have demonstrated what the funds have been used for.

On 28 March 2023 the European Commission issued EUR 6 billion of green bonds in its fourth sindicated transaction for 2023. The single tranche transaction was executed via the green bond due on 4 February 2048.

Investors demonstrated a strong interest in the transaction which was over 12 times oversubscribed. The investors interested in buying the green bonds were: fund managers (37.50%), bank treasuries (28.40%), insurance and pension funds (17.50%), central banks (12.50%) and hedge funds (1.50%).

The European Commission plans to fund 30% of its NextGenerationEU recovery programme by issuing green bonds. This will make the Commission the largest green bonds issuer in the world.

With the last transaction, the Commission has raised EUR 39.4 billion out of its overall EUR 80 billion funding target for the first half of 2023, or 49% of the total.

Source: Press release, 28 March 2023, Brussels

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