First issue of green and social bonds for municipal fundingNew indebtedness transactions were entered into for the 2017 financial year. For the first time in Catalonia, a public authority will be issuing public debt under sustainable terms and conditions. The funding that is received will have to be exclusively allocated to environmental or social projects and investments, whether in education, social services or employment.
Issuing green and social bonds worth 35 million euros, an unprecedented measure outside Madrid according to the Deputy Mayor for Economy and work, Gerardo Pisarello, is one of the new developments that have been presented for promoting alternative funding. Such a commitment to ethical banking as a municipal funding alternative has involved a large diversification in indebtedness: “Two years ago, 92% of our funding depended on conventional banking; today, however, ethical and public banking make up a very significant portion of our funding”, asserts Pisarello.
These initiatives fall under a new banking-related municipal policy, which is aimed at promoting a more pluralistic economy, by incorporating new banking services and funding offers in municipal management which include social and environmental criteria and clauses. The overall value for the new indebtedness transactions entered into for 2017 amounts to 126 million euros.
Public and ethical banking
Obtaining credit from public banking, more specifically, the European Investment Bank (EIB), consisted of a 40 million-euro loan for Barcelona City Council, which will be used for providing an impetus to the Right to Housing Plan for 2016-2025, which is aimed at funding the building of social rental housing in the city.
Ethical banking, which already took up 8% of the Council’s indebtedness last year, will continue to play its part and new long-term loans will be made with a further two banks, Fiare Banca Ética and Triodos Bank.
Thanks to the new funding transactions, Barcelona City Council will be maintaining its indebtedness at 835.5 million euros, the lowest for the last decade, which it had already achieved two years ago.