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Romania launches its first green bond, raising €2 billion to fund eco-friendly projects and attract sustainable investors.

Romania has made a significant entry into the sustainable finance world by issuing its first green bond. The bond, valued at €2 billion ($2.15 billion), was launched on Thursday. It attracted considerable attention, with bids surpassing €10 billion, according to Refinitiv and IFR.

The bond, maturing in February 2036, saw its pricing start at 300 basis points over mid-swaps. This was 45 basis points below the initial guidance. Romania is also raising €2 billion from a conventional 2031 eurobond, drawing bids of €6.5 billion.

This green issuance comes after over a year of preparation by Bucharest. Stefan Nanu, Romania's treasury chief, shared plans with Reuters for this benchmark-sized issue, aiming for the first half of 2024. Romania intends to be an annual issuer of green bonds, focusing on smaller volumes.

Green bonds are designed to fund projects with environmental benefits. Across Europe, governments have been issuing substantial green bonds. Romania will allocate the proceeds from this bond towards renewable energy, green transport, energy-efficient buildings, and reforestation.

The country plans to reduce net eurobond issuance to a maximum of €6 billion this year, down from €9.5 billion in 2023. Amid multiple elections, Romania aims to decrease its budget deficit to 5% of GDP, from last year's 5.7%.

Morgan Stanley commented on the issuance's competitive pricing, noting the value of Romania's bonds given the rating. In January, Romania capitalized on strong demand, issuing $4 billion in eurobonds for 2029 and 2034.

With stable outlooks from rating agencies, Romania's green bond venture marks a pivotal step towards sustainable investment and environmental projects.

Samira is an Electronics and Communications Engineer by profession, but deep inside, her heart is a nomad! She's a state champion debater, a public speaker, a scriptwriter, a theater actress, but most importantly — A GREEN CITIZEN! She thinks of herself as a storyteller who thrives on enjoying the life at fullest and telling everyone the tales of life.

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