National Settlement Depository (NSD) has taken on the role of depository for the Moscow Government’s green bonds placed on the Moscow Exchange on 27 May 2021, amounting to RUB 70 billion.
Moscow is the first region of the Russian Federation to issue bonds compliant with the ESG principles. The International Capital Market Association (ICMA) confirmed that the bonds are aligned with the Sustainable Development Goals and included the bonds in the Sustainable Bonds Database.
The Government of the Russian capital will use the proceeds to finance the environmental projects. In particular, the City intends to replace its bus fleet with electric buses and to build the Big Circle Line of the Moscow Metro.
“NSD is supportive of the ‘green’ and socially responsible investing approach. ESG transformation is one of our strategic priorities, and we are happy to implement the ESG principles together with our partners. The Moscow Government’s experience will point the right direction for other Russian regions”, commented Denis Buryakov, Managing Director for Depository Operations, NSD.
Moscow is the first Russian sub-federal issuer to confirm its commitment to the UN Sustainable Development Goals and its readiness to speed up implementation of projects aimed to improve the environmental situation and the quality of life in the megalopolis.
“Essentially, Moscow is shaping a new securities market segment in Russia by offering the first sub-federal green bonds and being actively involved in the development of the relevant regulatory framework. The offering attracted high demand from securities market participants for the first Russian green sub-federal bonds. The issue size amounted to RUB 70 billion, while demand exceeded supply 23%, with 721 investor orders received for RUB 86.3 billion worth of bonds. This showed that investors are interested in funding City’s environmental projects and demonstrated a great potential of responsible investment in Russia. Moscow is the trend setter here.Not only has successful placement of the 74th bond issue for RUB 70 billion resulted in an increase in the volume of securities traded in the Moscow Exchange’s Sustainability Sector, but this also has reshaped the structure of the green bond market”, said Elena Zyabbarova, Minister of the Moscow Government, head of the Moscow Department of Finance.
In April 2021, the Moscow Government placed RUB 35 billion worth of bonds, which are also serviced by NSD as depository.