DNV supports its first European Green Bond issuance under the new EU regulation by the Community of Madrid

The Community of Madrid (CdM) has become the first sub-sovereign to issue a public green bond aligned with the EU Green Bond regulation. With DNV’s pre-issuance review, the factsheet meets the criteria of EU Regulation 2023/2631, ensuring transparency and credibility.

In a landmark moment for sustainable finance in the public sector, the Community of Madrid has become the first Spanish region in Europe to issue a European Green Bond (EuGB) aligned with EU Regulation 2023/2631. DNV provided the independent pre-issuance review, confirming the factsheet’s alignment with the new regulation and reinforcing the transparency and credibility of the issuance.

With a €500 million, five-year bond, the Community of Madrid attracted strong international investor interest, generating €2.4 billion in demand from 89 investors. It achieved a coupon of 2.487% and a final spread of just 7 basis points over Spanish Treasury bonds, matching the tightest spread ever achieved by a Spanish autonomous region.

This landmark issuance highlights growing investor confidence in environmentally responsible public financing and demonstrates Madrid’s leadership in climate-aligned transport infrastructure development. Proceeds from the bond will fund low-carbon urban and suburban transport projects, contributing to the EU’s climate change mitigation objectives and supporting Madrid’s Energy, Climate and Air Strategy Horizon 2030.

Independent review by DNV ensures credibility and transparency

DNV conducted the pre-issuance review of the Community of Madrid’s Green Bond factsheet, validating that the use of proceeds, project selection, and environmental objectives met the strict requirements of Regulation (EU) 2023/2631. The review was delivered by an international team from DNV’s Spain and UK offices, bringing together deep technical and regulatory expertise in sustainable finance.

Juan Andrés Salido, Head of Department/Iberia at DNV, said: “Our independent review confirms that the Community of Madrid’s bond meets the stringent transparency and sustainability criteria set out in the new EU Green Bond Standard. This builds trust with investors and helps direct capital towards impactful climate solutions.”

George Oakman, Senior Sustainable Finance Consultant at DNV, added: “We’re proud to have supported the Community of Madrid in this pioneering issuance, contributing to a stronger and more transparent European Green Bond market. The Bond helps to accelerate Madrid’s drive to Net Zero and shows to other prospective issuers that the EUGB label adds real economic value.

Strong international investor appetite

The bond saw robust participation from international investors, with 68% of allocations going abroad. Investors from Belgium, the Netherlands, and Luxembourg accounted for 22%, followed by the UK and Ireland (12%), and Portugal (8%). Banks were the leading investor type (38%), followed by asset managers and official institutions (27% each). The issuance was coordinated by ING, BBVA, CaixaBank, , and Banco Santander.

Supporting climate action through transparent finance

The European Green Bond Standard, published in November 2023 and in force since December 2024, provides a voluntary framework designed to prevent greenwashing, enhance transparency, and mobilize private capital for sustainable activities. The Community of Madrid’s successful issuance sets a powerful precedent for regional governments across Europe aiming to access green finance under this new regulatory regime.

“This is a great example of how financial innovation and climate strategy come together. The Community of Madrid is showing what is possible when regions commit to transparency and long-term impact,” said Lars Sørum, Director, Regional Manager Europe at DNV. “We are proud to support the public sector in unlocking sustainable investment.”

By aligning financial instruments with robust sustainability standards, the Community of Madrid and DNV are contributing to a more credible, impactful, and transparent European green finance market.