Moscow's green bonds won the Green Eurasia competition

Moscow's green bonds won the Green Eurasia International Climate Competition. The Moscow practice was recognized as the best in the Green Financing nomination, said Maria Bagreyeva, Minister of the Moscow Government, Head of the Department of Economic Policy and Development of the City of Moscow.

«Moscow received the competition award as the first Russian region to issue sub-federal green bonds. This event served as an impetus for the development of the green finance market in Russia. Investors believed in green bonds, having appreciated a reliable and liquid instrument related to the today’s green agenda. The volume of placements in the sustainable development sector of the Moscow Exchange, the amount of which before our issue was about 50 billion rubles, has increased by more than five times by today. In addition, specifically for Moscow bonds, the Exchange substituted the listing rules, ensuring the possibility of admitting securities of all constituent entities of the Russian Federation to the sustainable development sector», — said Maria Bagreyeva. 

The competition was held by the Agency for Strategic Initiatives and the Eurasian Economic Commission to search for effective climate practices aimed at the sustainable development of the member states of the Eurasian Economic Union (EAEU). In 10 competition nominations, about 300 applications from participants from eight countries were considered: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan, Azerbaijan and Latvia. The authors of the winning projects in each category will receive recommendations for replicating their practices in the EAEU countries.

The participants' works were evaluated according to eight criteria, such as «General idea and content», «Novelty, uniqueness», «Competitive advantages», «Results and efficiency», «Team qualification and experience», «Expert confirmation», «Public recognition» and «Replication Potential». The criteria «Results and effectiveness» and «Potential for replication» accounted for almost half of the weight of the evaluation of the work.

The volume of green bonds issued by Moscow amounted to 70 billion rubles and became a record issue for a single issuer for the entire existence of the sustainable development sector of the Moscow Exchange. The funds received were used to purchase 400 new electric buses, to build and reconstruct 21 stations and 48 kilometers of tracks on the Big Circle Line. At the end of 2022, this made it possible to ensure an annual reduction in pollutant emissions by almost 600 tons per year and greenhouse gases in the city by about 30 thousand tons per year.

«Moscow intends to continue the successful practice of green financing and at the end of May will issue green bonds for the public, which will allow citizens to take part in the city's environmental projects. The funds received from their placement will be used to purchase electric buses for urban public transport. The advantage of the «people's» issue will be the absence of risks for the investor of losing funds: the bonds are not traded on the stock exchange and therefore do not lose value. In addition, citizens can sell them back to the city and receive income for the entire period of ownership. The placement of the bonds will take place on the Finuslugi platform of the Moscow Exchange», — added Maria Bagreyeva.

According to the Minister of the Government of Moscow, head of the Moscow Department of Finance Elena Zyabbarova, green bonds of the city are one of the most reliable financial instruments in Russia. They are in high demand among investors, which indicates a great potential for responsible financing in the country.

«And Moscow sets the trend in this process by investing the funds raised in the development of important environmental projects. The successful placement of green bonds in 2021 qualitatively changed the structure of the securities market and became a milestone in the development of green investment in Russia. Very soon, Moscow will issue the first green bonds for the public. Citizens will have the opportunity to profitably and reliably invest in the development of the capital. The process of acquiring securities will be as simple and convenient as possible, without commissions and intermediaries — in your personal account on the Finuslugi platform of the Moscow Exchange», — said Elena Zyabbarova.

The award ceremony was held on May 24 as part of the II Eurasian Economic Forum in conjunction with the Supreme Eurasian Economic Council’s meeting with the participation of the heads of states — members of the Eurasian Economic Union and observer states. The events are held within the framework of the presidency of the Russian Federation in the bodies of the EAEU in 2023.