Caja Rural de Navarra's (CRN) second green covered bond will be used to refinance green projects across the Rioja, Navarre and Basque regions of Northern Spain. The €500 million ($540.7 million) bond will primarily be used to retrofit the housing stock.

The Spanish retail bank believes green bond financing of green loan grants to facilitate green building construction and renovation can have a sizable impact on the EU's carbon emissions from buildings. Other use of proceeds include forest management, whereby companies that qualify can receive the endorsement of an official forest certification and sustainable agriculture under the criteria set by the EU Taxonomy.

"Caja Rural de Navarra is a pioneer in the green bond segment, being the only Spanish issuer of green covered bonds, with two benchmark transactions focused on buildings energy efficiency," said Miguel García De Eulate Martín, head of treasury & capital markets at Caja Rural.

"This allows us to align the expectations of bondholders with those of our clients, who are willing to buy or improve the energy efficiency of their home. This is an example of how the sustainable bond market can have a direct impact in the real economy through retail banks actions."

CRN also publishes data on the energy efficiency and carbon emissions of its mortgage portfolio.

"It shows a unique use of covered bond structure with a broad focus on underlying projects and potential unique exposures to critical sustainable agriculture and forest management," said one Sustainable Debt Awards judge.

Another added that "the proceeds are very clear and transparent, especially issued in the form of a covered bond, making it a very investor-friendly product".

CRN aims to be an example to other financial institutions focusing both on liability (i.e. green bond issuance) and asset (i.e. green loan origination) management.