Italy sovereign green bonds hit jackpot

Italy’s first sovereign green bonds raised a record $8.5bn from the sustainable debt market today, with the lead banks on the deal receiving orders worth €80bn for those maturing in 2045.

The proceeds from the sovereign green bonds will fund the country’s green transition strategy. According to Italy’s framework for their issuance, the funds can be deployed in sectors including renewable electricity and heat, energy efficiency, transport, pollution prevention and control and circular economy, protection of the environment and biological diversity,and research.

Europe is at the forefront of debt tied to more sustainable activities. The EU has sold a series of social bonds tied to a jobs program and is set to become the largest green debt issuer after its recovery fund sales get underway later this year. At a country level, Italy now joins Poland, Ireland, Sweden and the Netherlands in the sovereign green bonds market. France has issued 11 green bonds since 2017; Germany joined the market last year with two green Bunds; and in his budget on Wednesday, the UK Chancellor Rishi Sunak unveiled plans to sell at least £15bn of green bonds in two offerings this year. Spain plans to follow Italy with a green bond offering in the second half of 2021.

Mastercard, meanwhile,  has issued a $600m sustainability bond and is planning to use proceeds to further its alignment with the UN’s Sustainable Development Goals (SDGs) and deliver its 2050 net-zero pledge.