27th September 2023, Skopje – Today, Ministry of Finance published the Prospectus for the first issue of green bonds. This is the second instrument the Ministry of Finance launched on the domestic capital market this year, thus expanding the offer of financial products and boosting the competition.
Green bonds are securities, which will be used for investment projects for green development. In other words, they are intended to stimulate and support environment protection projects, as well as finance eco projects. He, as the previously introduced development bond for citizens, is a new product on the domestic market, being foreseen under the Strategy for Development of Government Securities Market, the Public Debt Management Strategy and the Growth Acceleration Plan.
First issue of this green bond amounts to EUR 10 million, whereby the auction will be held on 3rd October 2023. Citizens and legal entities, interested in taking part at the auction may submit application to participate therein via banks. Interest rate on the Green Bond accounts for 4.75% per year. Issued green bonds have a 2-year maturity deadline, i.e. falling due on 5th October 2025. Interest, along with the principal, will be paid on 5th October 2024 in the first year and on 5th October 2025 in the second year.
“Introduction of this instrument is aimed at developing the capital market in the country, as well as boosting the investments, which will contribute to accelerating the economic growth. The purpose of the Green bond, as well as the other instruments foreseen under the Growth Acceleration Plan, based upon the Juncker Plan, is to mobilize the private capital in addition to the public one, in support of the economic growth as an ultimate objective thereof. They are part of the newly introduced mechanisms, instruments, funds and sources of financing, which will provide for producing multiplying effects, as well as mobilizing much more funds and investments from the private sector itself, in addition to the public sector investments”, Minister Besimi said.
As per the Minister, investing in this instrument provides for supporting the development of green investments projected under the Budget. “Investing, i.e. purchasing a green bond, provides for direct support of the Budget development, i.e. green investments aimed at protecting the environment. Historic high level of capital expenditures is projected in this year’s Budget, guided by the golden rule of government spending, i.e. expenditures related to capital investments are projected to be higher than the deficit. This means that all funds, provided, among the other, via this instrument as well, will be geared towards capital projects including a green investment component therein”, Minister Besimi pointed out.
Funds under this auction will be focused on the established Energy Efficiency Fund within the Development Bank, wherefrom companies will be offered favorable funds for implementing projects aimed at environment protection.
Green bonds is issued on the securities market upon the successful introduction of the development bond for citizens, as for which the first issue was published during July 2023, with the demand therefor being two and a half times higher than the amount offered under the published Prospectus.
In line with the Capital market Development Strategy and the Growth Acceleration Plan, in addition to these two instruments, in the next period, project and development bonds will be offered, destined for development and infrastructure projects. In addition, upon issuing the green bond, the second development bond for citizens will also be issued.
Citizens and legal entities interested in taking part in the auction and purchasing green bonds, may submit application by Monday, 2nd October 2023, inclusive.