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European Commission raises €5 billion in NextGenerationEU green bonds

The European Commission has issued a further 5 billion euros in NextGenerationEU green bonds in the 10th syndicated transaction under the NextGenerationEU recovery instrument.

The long 25-year bond due on 4 February 2048 was over six times oversubscribed, a very positive outcome, especially bearing in mind the turbulent market in recent weeks, says the European Commission.

With this transaction, the Commission has issued a total of 47.5 billion euros in the first half of 2022, bringing it one step closer to the 50 billion euros NextGenerationEU funding target for the first six months of the year.

NextGenerationEU is a temporary instrument bringing up to 800 billion euros in support to Europe’s recovery from the coronavirus pandemic and building a greener, more digital and more resilient Europe.

To finance NextGenerationEU, the Commission is borrowing up to 800 billion euros in current prices on capital markets by the end of 2026. Out of the total funds borrowed to date, around 100 billion have been disbursed under the Recovery and Resilience Facility to EU Member States, and a few billion to other budgetary programmes entitled to funding under NextGenerationEU.

Up to 30 per cent of the total will be issued as NextGenerationEU green bonds, under the NextGenerationEU green bond framework. The goal of NextGenerationEU green bonds is to provide direct support to projects that enable Europe’s green transition and to strengthen the role of the euro in the market for sustainable investments.

The Commission has so far raised 118.5 billion euros in long-term EU bonds under the NextGenerationEU programme since its launch in June 2021, of which 28 billion euros in NextGenerationEU green bonds. The funds are being used to finance Europe’s economic recovery and long-term resilience via the Recovery and Resilience Facility and other EU budget programmes.

“Today’s very successful deal is a demonstration of the leadership position that the EU is gaining in euro-denominated debt, which is particularly important at turbulent times,” said Commissioner in charge of Budget and Administration, Johannes Hahn. “With this, we continue providing support to the European economies when needed the most.”

The Commission will announce its funding target for the second half of the year by the end of June 2022.

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