The Treasury accelerates the ecological turn of the economy and leaves mining, livestock and nuclear without green bonds

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Spain launches a new formula for dyeing green its projected economic recovery. However, not all sectors will be able to benefit from this new route. The intensive livestock, mining and nuclear fission energy projects they will not be able to access the funds raised through sovereign green bonds that the Treasury wants to launch in September, no matter how sustainable they are.

With the objective of achieve the highest rating available, the Government of Spain has chosen to exclude from its policies susceptible of financing through green bonds those sectors that generate the most problems when marrying them with the concept of sustainability. And so it has been collected in the ‘Green Bond Framework’ released this Wednesday by the Public Treasury.

The list of excluded sectors includes, in addition to those already mentioned, other activities related to energy. Specifically, the exploration, investigation and exploitation of fossil fuels and also all power generation systems that emit more than 100 grams of CO2 per kilowatt-hour. A more than demanding figure if one takes into account that in 2017 the average of the Spanish industry was 287 grams for this concept.

Slam the door to mining

As regards the mining, the decision is one more blow for a sector that languishes in the country. In this chapter, it should be noted the strong opposition that is being encountered by one of the most cutting-edge and recent projects in the sector: the uranium plant that Berkeley wants to put into operation in the Salamanca town of Retortillo.

With this not resounding, the notice extends to other initiatives in the sector that could be a decisive factor towards the economic and digital transformation of the economy that the Executive of Pedro Sánchez wants to promote. Such could be the case of the project for the extraction of cobalt in Galician lands.

Social issue

The veto of some green bonds with which the Government expects to capture up to 13.6 billion euros this year it also encompasses other sectors whose main controversy lies more in the social than in pure ecology. These are the industries of the alcohol and the tobacco, the sector of games of chance Against which Minister Garzón maintains an open -for the moment unsuccessful- crusade and the manufacture and hiring of armament.

One of the consequences of the slamming of the door to these sectors has already been consummated. Almost two months before the first issues of Spanish sovereign green bonds arrive, the agency that has been entrusted with their assessment has given them “the highest possible rating” in terms of environmental, social and governance sustainability (ESG), according to the Vice President of Economic Affairs, Nadia Calviño.

Rating and filters

The existence of these filters from the origin of the project and the detailed protocol that will govern the issuance and monitoring of these ecological bonds has already placed them ahead of those of other European countries that until now had the lead, like France, Italy and the United Kingdom. So much so that they are placed in the 14th out of 178 countries evaluated by Vigeo Eiris, the specialized division of Moody’s agency, whose services have been contracted by the Government.

In this sense, as the Secretary General of the Public Treasury, Carlos San Basilio, announced months ago, a Working Group has been established for the Structuring of the Issues of Sovereign Green Bonds of the Kingdom of Spain and the Promotion of Sustainable Finance . To him they will refer each of the ministries the items in your budget that can be financed through these debt securities.

The First Vice President and Minister of Economic Affairs, Nadia Calviño.

The goal of the body will be filter the proposals to get the best fit from projects to the demand of the most demanding investors. A key issue for a year 2022 in which an increase in the rates of Spanish bonds to use of 80% is already awaited due to doubts about the solvency of the Spanish economy and the foreseeable withdrawal of part of the Bank’s support Central European (ECB) of which until now have been enjoying as an open bar the economies of the Eurozone.

For this, not even the sectors indicated as financing objectives through green bonds they have guaranteed the use of this mechanism. And it is that the new body will also ensure that the sustainability conditions indicated at the time of its signaling and issuance are respected, so that the Framework presented this Wednesday opens the possibility even to the replacement of one project by another in case of not meeting the expected standards.

Leading advisers

The objective is that at all times “the quality of the associated spending is ensured” so that the spending incurred by the public coffers via coupons can also be more bearable. A chapter in which even the courts come into play, since it is noted that potential controversies will be taken into account, such as those related to “legal proceedings instituted due to a breach of the regulations on public procurement.”

In order to carry out this scrupulous selection, the Government has already hired the services of two experts in the field, as Invertia has learned. Both the French Crédit Agricole and the Spanish BBVA They have been selected as advisers to accompany these first steps of green bonds, a territory in which the latter managed to be crowned leader of the Spanish market in the midst of the pandemic.

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