Italian govt issues inaugural green bond; issue size €8.5bn

Written by Adam Cadle

04/03/2021

The Italian government yesterday issued its inaugural green bond for an amount of €8.5bn and a maturity of 24 years.

In this first green bond issue, Italy has identified six categories of use of proceeds: renewable electricity and heat; energy efficiency; transport; pollution prevention and control and circular economy; protection of the environment; and biological diversity and research. It was confirmed that around 90% of the bond will be allocated to transport, energy efficiency and protection of the environment and biological diversity.

Italy has become the tenth European country to issue a green bond after last year’s sovereign boom in Europe.

“We believe this is an important milestone for the green bond market as treasury portfolios make large allocations to Italian government bonds,” said Bram Bos, lead portfolio manager green bonds at NN Investment Partners.

“The growth of the green bond market keeps on accelerating and the strong increase in issuance from governments gives more investors the chance to greenify their fixed income portfolios. We are reaching a stage in which replacing part of a regular government bond portfolio with green government bonds is a logical and feasible step. The government bond market has become more diversified and will keep on growing, with countries like Spain, UK and Singapore all expected to issue inaugural green bonds later in the year.”

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