Putin allowed the use of the green bond mechanism in various sectors of the economy

The placement of green bonds to attract financial support for large projects can be replicated in projects in various sectors of the economy, Russian President Vladimir Putin said at a meeting with the head of the Russian Environmental Operator (REO) Denis Butsaev. Meeting transcript published on the official website of the Kremlin.

According to Butsaev, such a tool allows creating a “budget leverage”, when 10 rubles will be attracted against one budget ruble. from the market. According to him, the placement of REO bonds will make it possible to use funds more efficiently, taking into account budgetary co-investment. Butsev also added that Russian financial institutions are showing great interest in such investment instruments.

“We have now registered an issue for the first 100 billion. To be honest, there is a very good demand from financial institutions, according to preliminary applications, it is a multiple of the funds we need. With a 90% key subsidy, we get between 4.5% and 5.5% effective rate for the borrower. Probably, there has never been such cheap money in the industry, when compared with other industries that were faced with such tasks,” Butsaev said.

“So the tool is good. It can be replicated, maybe in other areas,” the Russian president said.

Green bonds are securities provided on a repayable basis and used to finance environmental projects. In their mechanics, green bonds are no different from ordinary ones, but they must comply with special environmental principles.

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