The European Commission has successfully raised €11 billion through a dual-tranche bond issuance, including €5 billion in NextGenerationEU (NGEU) Green Bonds, reinforcing the EU’s commitment to ESG principles and a carbon neutral strategy. These funds will directly support climate-focused initiatives across the European Union, driving sustainable investments and accelerating the region’s transition to a greener economy. 

Investor demand for the bonds was exceptionally high, with the 7-year bond oversubscribed 13 times and the 25-year green bond 14 times, bringing total bids to over €145 billion. This overwhelming response highlights strong market confidence in sustainable finance and the EU’s ability to attract global investors committed to environmental, social, and governance (ESG) principles. 

The proceeds from these green bonds will fund projects under the Recovery and Resilience Plans of EU Member States. These initiatives focus on renewable energy, energy efficiency, sustainable transport, and climate adaptation measures, aligning with the EU’s carbon neutral strategy. The NGEU Green Bond Framework, which governs these issuances, is aligned with the Green Bond Principles of the International Capital Market Association (ICMA), ensuring that investments adhere to globally recognized sustainability standards. 

The issuance was structured into two tranches: a €6 billion 7-year bond maturing in December 2031 with a 2.5% coupon and a €5 billion 25-year green bond maturing in February 2050 with a 3.25% coupon. The bond issuance was managed by Citi, Deutsche Bank, HSBC, Morgan Stanley, and Société Générale. 

With this latest funding, the European Commission has raised €26.5 billion toward its €90 billion bond issuance target for H1 2025. The next EU-Bill auction is scheduled for February 19, 2025. 

This bond issuance strengthens the EU’s position as a leader in ESG-driven finance, providing critical support for the EU Green Deal and accelerating the transition to a carbon-neutral economy. The EU continues to set a benchmark for sustainable finance, demonstrating how large-scale investments can drive climate resilience and economic sustainability. 

By leveraging green finance, the EU is helping Member States meet their net-zero targets, ensuring long-term environmental and economic benefits. As global demand for ESG-aligned investments grows, the success of these green bonds showcases the increasing role of sustainable finance in shaping the future of capital markets. 

Sources : 

https://esgnews.com/eu-raises-e5-billion-in-nextgenerationeu-green-bonds-to-fund-climate-projects/ 

https://ceenergynews.com/finance/european-commission-raises-e5-billion-in-nextgenerationeu-green-bonds/ 

https://cyprus.representation.ec.europa.eu/news/nextgenerationeu-european-commission-raises-eu5-billion-green-bonds-successful-10th-transaction-2022-06-22_en