BRUSSELS, Sept. 7 (Xinhua) -- The European Commission on Tuesday announced the adoption of its new Green Bond framework, taking a step towards issuing 250 billion euros (about 298 billion U.S. dollars) in green bonds, equivalent to 30 percent of the bloc's package for recovering from the COVID-19 pandemic.
The framework provides investors with assurance that the mobilized funds will go to green projects and that the European Commission will report on its environmental impact.
Now that the framework has been adopted, the European Commission will proceed with the first issue of green bonds in October at market conditions, the Commissioner for the EU budget Johannes Hahn explained at a press conference on Tuesday.
Hahn said that it was the European Union (EU)'s intention to issue up to 250 billion euros in green bonds by the end of 2026, making the 27-nation bloc the world's largest issuer of green bonds and an expression of its commitment to sustainability by placing sustainable finance at the forefront of the EU recovery effort.
Europe's recovery from the effects of the coronavirus pandemic and the green transition go hand in hand, Hahn said, adding that the green bonds will help Europe achieve its target of being carbon neutral by 2050 and a key aspect of the union's efforts to fight climate change.
The NextGenerationEU Green Bond framework will play an important role to finance the mandatory share of 37 percent of climate expenditure under the Recovery and Resilience Facility, he said.
The NextGenerationEU fund is a recovery package of the EU to support member states hit by the COVID-19 pandemic. Agreed to by the European Council in July 2020, the fund is worth 750 billion euros.
The Commission intends to issue 80 billion euros of long-term bonds this year, topped up by short-term EU Bills. The program for the EU Bills is scheduled to begin on Sept. 15, with two EU Bill auctions planned per month on the first and third Wednesday of the month.
"Judging from the Commission's experience in the first issuance of social bonds and the growing green bond market, we expect the demand for green bonds to be high. All of this is good news for citizens and companies relying on a swift recovery committed to the green transition," Hahn said. (1 euro = 1.19 U.S. dollars) Enditem