TASHKENT, Uzbekistan, October 6. Uzbekistan has placed Eurobonds worth $660 million and the first green Eurobonds worth 4.25 trillion Uzbek soums ($349.17 million) on the London Stock Exchange, Trend reports.
Green bonds are placed for three years at a rate of 16.25 percent per annum, although initially Uzbekistan’s Ministry of Economy and Finance expected a rate of 18 percent. The set rate of 16.25 percent is lower than the interest rates in the domestic market, where the Central Bank issued 2-year government securities at a rate of 17.57 percent per annum.
As for dollar-denominated 5-year Eurobonds worth $660 million, the rate was initially expected to be in the range of 8.5−8.62 percent, but due to high demand from investors ($2 billion), the rate decreased to 8.125 percent plus a coupon of 7.85 percent, allowing for cash payment to bondholders from Uzbekistan.
Uzbekistan’s Ministry of Economy and Finance noted that the proceeds from the green bonds will be used to finance green projects, such as the introduction of water-saving technologies, the development of rail transport and metro, the organization of sanitary cleaning and maintenance of cleanliness in settlements, as well as the creation of protective forest plantations against wind erosion and siltation of water bodies.
In September 2023, Asian Infrastructure Investment Bank (AIIB) invested $25 million in Uzbekistan’s Uzpromstroybank sustainability bonds, which were planned to be used to finance green projects, including ones to improve energy efficiency, reduce greenhouse gas emissions, ensure water security, support women-led initiatives, and finance small and medium-sized businesses.
These are the first green bonds issued as part of the sustainable financing program of the Uzpromstroybank JSCB. The bonds are issued in accordance with the principles of green and social bonds of the International Capital Markets Association.