Reşiţa municipality floats EUR 8.8 mln “green” bonds at 7.5%

The first green municipal bonds listed at the Bucharest Stock Exchange will start trading on March 5, after the Reşiţa municipality placed EUR 8.8 million from investors through a private placement that took place last fall.

The amount represents half of the total that the town hall initially wanted to attract, Ziarul Financiar reported.

The money will be partly used for the development of a 21MWp solar park to power public institutions and public transport, which is funded from the European Union’s budget but needs local co-financing. The municipality will refurbish the tram network and buy electric buses as well.

The bonds have a maturity of 10 years and an interest at the six-month Euribor level plus a fixed margin of 3.5%, meaning 7.4% at this moment.

A solar power plant with an installed capacity of 21MWp would normally be connected to the transmission network. However, the municipality’s mayor, Ioan Popa, said the photovoltaic park would consist of two units. One of them would be used by the municipality, mostly for educational units, public lighting, trams, and electric buses. The other unit, operated by a newly established firm, would produce electricity for sale.

Popa estimated that the facility would generate up to EUR 4 million in annual income. The project was launched less than a year ago.

(Photo source: Bucharest Stock Exchange)