Following the cabinet’s approval last week, the Finance Ministry is working to prepare the edition of a bond known as a “EUGB” pursuing environmentally sustainable investments or environmentally friendly business activities.

As estimated, with the Green Bond, Cyprus is expected to have enough liquidity to meet its financing needs for green projects for the next few years.

The revenues Cyprus raises from this bond will be allocated to public development projects to protect the environment, green development, and environmental projects.

They are designated bonds intended to encourage sustainability and support environment-friendly investment.

They finance projects aimed at energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, protecting aquatic and terrestrial ecosystems, clean transportation, clean water, and sustainable water management.

These bonds also promote the cultivation of environmentally friendly technologies and climate change mitigation.

Green bonds appeal to investors as they offer incentives such as tax exemption and tax credits, making them a more attractive investment than a taxable bond.

They will attract a new pool of investors or investment funds looking to invest in the green economy.

As an official of the Public Debt Management Office told Kathimerini Cyprus online edition, the standards of this bond have not been set yet. Still, there are tangible examples of issues from other countries.

The official explained that Cyprus is not obligated to proceed with such a bond.

However, given their international demand and environmental issues becoming more important to the investing public and rating agencies, Cyprus would inevitably need to issue green bonds.

The official confirmed that authorities are committed to using the pool of money for specific projects and will not find their way to the state’s general coffers.

In September, the European Commission issued the first NextGenerationEU green bond, raising €12 bln to be used exclusively for green and sustainable investments across the bloc. It represents the world’s largest green bond issuance ever.

The NextGenerationEU green bond issuances funds will finance green and sustainable expenditure under the Recovery and Resilience Facility.

Eligible investments from the already approved plans include a research platform for the energy transition in Belgium or the construction of wind power plants on land in Lithuania.

A minimum of 37% of every Recovery and Resilience Plan has to be devoted to the green transition, with Member States striving to do more.

Source: Financial Mirror