Greece is preparing to join the growing list of countries issuing green bonds, the plan being to funnel proceeds into green projects at areas that have been affected by this summer’s extensive fires.

But the venture has its challenges and commitments. Any state or corporation accepting funds from investors for green bonds commits to specific environmental clauses.

Projects must be classified entirely eco-friendly, based on international criteria; not financed by recovery funds or the National Strategic Reference Framework (NSRF); and not included in any public investment programs that could widen the primary deficit.

Also, projects funded by green bonds need to have short-term completion dates of no more than two or three years.

At this stage, it remains unclear when the Greek government will move ahead with its first green bond issue.

Greek corporations, including TERNA, followed by the power utility PPC, have already issued green bonds.

PPC raised 500 million euros through a sustainability-linked bond in mid-July at an interest rate of 3.375 percent, one of the lowest ever borrowing rates secured by PPC, following a March SLB issue that provided 775 million euros.

In return, PPC has committed to a specified CO2 emission reduction of 40 percent by the end of 2022, compared to the corporation’s 2019 level, which represents a cut of 9.2 million tons, otherwise interest rate penalties will be imposed.