BRUSSELS -- The European Commission said on Tuesday it would issue up to 250 billion euros in green bonds this fall as part of its plans to finance the 27-nation bloc’s recovery from the coronavirus crisis.
The EU’s executive arm said the bonds will represent 30% of NextGeneratoonEU’s total issuance.
“The framework provides investors in these bonds with confidence that the funds mobilized will be allocated to green projects and that the Commission will report on its environmental impact,” the commission said.
The commission said it will issue the first green bond in October, subject to market conditions.
Johannes Hahn, the commissioner in charge of budget, said the “EU’s intention to issue up to 250 billion euros in green bonds between now and end 2026 will make us the largest green bond issuer in the world.”
To finance the recovery stimulus, the EU’s executive arm said it will raise from capital markets up to an estimated 800 billion euros by the end of 2026. In total, member states have agreed on a 1.8 trillion euro budget and pandemic recovery package.
As part of its “Green Deal" ambition, the EU has pledged to cut emissions of the gases that cause global warming by 55% over this decade and has set the target of being carbon-neutral by 2050.
To receive their share of the recovery aid, EU countries have accepted that their national plans must dedicate at least 37% of the budgets to climate-related projects.
The commission also confirmed its plan to issue a total of around 80 billion euros of long-term bonds this year, topped up by “tens of billions of euros of short-term EU-bills."