The Ministry of Economy and Finance has entrusted Banca Monte dei Paschi di Siena, BNP Paribas, Citibank, Crédit Agricole and UniCredit with the dual tranche issue of a new benchmark 10 year BTP and a new one Bitp Green. What they are and what they will be used for is explained in the note Mef.
BTP and Green BTP issuance: the Mef note
The Ministry of Economy and Finance has entrusted a selected group of banks, including Banca Monte dei Paschi di Siena, BNP Paribas, Citibank, Crédit Agricole and UniCredit, with the mandate fordual tranche issue of two new financial instruments: a 10-year BTP and a Green BTP.
The 10 year BTPwith maturity set for 1 August 2035, represents a typical issue of government bonds, intended to finance the public budget. The expected amount for the issue is one maximum of 5 billion euros. The operation is aimed at guaranteeing the stability of the Italian public debt and raising resources to finance ordinary state expenses.
The Btp Green, expiring on 30 April 2046, is another instrument issued in this dual tranche, but with a distinctive feature: the proceeds deriving from its sale are intended exclusively for finance initiatives with a positive impact on the environment. The Ministry has already outlined, in the “Reference framework for the issuance of Green Government bonds”, the specific areas of intervention, in line with the United Nations Sustainable Development Goals (SDGs) and with the European Taxonomy of sustainable activities .
Btp Green for sustainable initiatives
The BTP Green has as its primary objective the financing of projects that have a positive impact on the environment, in particular in the areas indicated by the Reference Framework published by the Mef in February 2021.
There are six categories of expenditure eligible for financing through the BTP Green, and they include crucial sectors for environmental sustainability:
- renewable sources for the production of electricity and thermal energy;
- energy efficiency;
- transport, with particular attention to investments in railway infrastructure and sustainable means of transport;
- pollution prevention and control and circular energy;
- protection of the environment and biological diversity;
- research.
The funds raised through the BTP Green issued in 2025 will mainly be aimed at financing two specific areas: the energy efficiency of buildings and interventions in the transport sector, with a focus on railway infrastructures and the electrification of routes. In particular, the energy redevelopment of Italian real estate and support for sustainable railway mobility represent the main destinations for these funds.
The Reference Framework establishes that the majority of the resources will be allocated to expenditure planned for 2024 and 2025, with an indicative distribution as follows:
- 27%-37% in 2024
- 55%-65% in 2025
The MEF strategy for the ecological transition continues with the Green BTPs.
The main features and performance
Green BTPs are medium-long term securities and guarantee a fixed income established by the coupon, paid semi-annually, in addition to the reimbursement of the nominal value at maturity. As stated, securities can be exchanged:
- by institutional investors both on the regulated secondary wholesale market, for transactions of no less than 2 million euros, and on non-regulated ones;
- by individual savers, who can trade the security on the Electronic Bond and Government Securities Market, where operations with a minimum denomination of 1,000 euros are permitted, or on other trading platforms, according to the principle of best execution introduced with Mifid.
