#1CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid INVESTOR PRESENTATION May 2023#2TABLE OF CONTENTS 1. MACRO OUTLOOK AND FORECASTS 2023 II. FUNDING PROFILE AND STRATEGY III. SUSTAINABLE BOND 2023 & IMPACT REPORT 2022 IV. GREEN BOND 2022 & IMPACT REPORT 2021#3CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA Comunidad de Madrid I. MACRO OUTLOOK AND FORECASTS 2023#4Community of Madrid key figures ↑ GDP pc 2021* 34.821€ (Madrid) 25.498€ (Spain) * Last official data available Average annual population growth (2011-2021) +0.5% (Madrid) +0.2% (Spain) ↑ Stock of companies 2022 558.607 +2,11% YoY. (Madrid) 3.430.663 +1,90% YoY. (Spain) ↑ CPI Data (Abr- 2023) +3,4% YoY. (Madrid) +4,1% YoY. (Spain) ⇓ Unemployment rate (1Q2023) 11,01% (Madrid) 13,26% (Spain) GDP: 234,6 bn € Population: 6,7 mil % National: GDP: 19,4% Population: 14,33% Source: Community of Madrid, and INE ↑ ICTs Services (1Q2022) Region best positioned in advanced digital services such as Artificial Intelligence or Big Data ↑ R&D expenditure (2021) 2.63% over GDP (Madrid) 1.43% over GDP (Spain) Foreign Investment 64,7% of the National Total (2022). 4#5www The Community of Madrid in Spain The regional GDP of the Community of Madrid in 4Q22 managed to recover its pre-pandemic level with growth of 5.0% YoY, while the evolution of the national economy as a whole was not as positive. In terms of population, the Community of Madrid relative share over the national population stands at 14.3% at the end of 2021, with a total population of 6.751.251 (out of a national total of 47.385,107). Contribution by region to national GDP (2021) Population distribution by Autonomous Community (2021) Madrid Catalonia Andalusia 19,4% 19,0% 13,3% Valencia 9,3% Basque Country 5,9% Galicia 5,2% Castile - Leon 4,8% Castile la Mancha 3,5% Canary 3,5% Aragon 3,1% Murcia 2,7% Balearic 2,5% Asturias 1,9% Extremadura 1,7% Navarre 1,7% Cantabria 1,1% Rioja 0,7% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% Source: Community of Madrid, INE, Economy* Andalusia Catalonia Madrid 18,0% 16,2% 14,3% Valencia 10,7% Galicia 5,7% Castile and Leon 5,0% Canary Islands 4,7% Basque Country 4,6% Castile- La Mancha 4,3% Murcia 3,2% Aragon 2,8% Balearic 2,6% Extremadura 2,2% Asturias 2,1% Navarre 1,4% Cantabria 1,2% Rioja 0,7% 0,0% 5,0% 10,0% 15,0% 20,0% 5#6The Community of Madrid in Europe In 2020, Madrid was ranked as the sixth largest regional economy in the EU and the largest in Spain. Despite the impact of Covid-19, Madrid continued outperforming both the national and EU GDP growth average during 2021 and the beginning of 2022. Region Country GDP (€ million)* GDP PPS (€ million) UE - 27 Ile-de-France Lombardia Oberbayern 13,394,141 13,394,141 France 710,091 652,399 Italia 365,515 367,946 Germany 273,501 247,523 Rhône-Alpes France 231,701 212,877 Düsseldorf Germany 217,053 196,437 Community of Madrid Spain 216,528 230,618 Stuttgart Germany 215,437 194,975 Catalonia Spain 212,931 226,787 Darmstadt Germany 203,858 184,495 Köln Germany 193,315 174,953 Istanbul Turkey 188,377 461,463 Lazio Italy 186,298 187,537 Eastern and Midland Noord-Holland Ireland 186,167 155,277 Netherlands 171,053 147,674 Zuid-Holland Netherlands 168,986 145,890 Source: Eurostat *Year 2020 6#7GDP dynamics in 2021: conditioned by the effects of the pandemic Interanual change (%) of main sectors Community of Madrid 33,2 30,0 25,0 23,0 20,0 17,1 15,0 3,6 8,6 10,0 5,3 6,0 6,0 4,5 5,3 3,9 5,6 5,0 2,9 4,1 3,2 1,1 1,1 0,6 0,0 -5,0 -3,6 -2,8 -10,0 Agriculture Industry Construction Services www wwww Historically, the Region has registered a higher growth than the national average. In 2020, due to the pandemic, GDP fell -11%, in line with the national average (-11,3%). Consequently, the economic recovery in 2021 has been intense. GDP Community of Madrid: +5,4% 2021 vs 2020 (ESP: +5,5%). Regional economic activity made gradual progress in its recovery throughout 2021, especially in Q2. Largest activity recovery in 2021: Distribution and hospitality services (+17,6%) and construction (10,1%) Evolution of real Gross Domestic Product (%) 40,0 35,0 12021 2021 III 2021 IV 2021 2021 Source: IECM Breakdown of YoY (%) change of services industries 2018 2019 8 5,4 5,5 5,75,5 6 4 4,0 3,0 2.72,3 3.12,0 2 0 -2 -4 -6 -8 -10 -12 -11,0-11,3 -14 2017 70,0 60,6 60,0 50,0 40,0 30,0 12,6 16,7 20,0 4,5 9,1 7,5 9,5 10,0 3,2 2,0 2,9 1,3 1,5 0,0 -0,2 -1,8 -10,0 -6,9 -20,0 2020 2021 2022 Distribution and hospitality services Business and financial services Other services Source: IECM and INE ■C. Madrid Spain 12021 2021 III 2021 IV 2021 2021 Fuente: IECM 7#8wwwww Distribution by sector 2021: The regional economy has a high weight in the services sector, with 85.2% vs. the national average of 75.6% in 2021. www The community of Madrid has been affected to a greater extent by the pandemic, due to the high weight in the service sector and specifically the link with tourism, which subsequently resulted in a greater recovery. Composition of constant GVA by sector in Madrid, 2021 (% of total) Composition of constant GVA by sector in Spain, 2021 (% of total) ■Agri. ■Indus. ■ Agri. ■Indus 5,3% Const. 4,2% 85,2% 10,5% 21,9% ■Const. 10,7% 6,3% 10,1% 16,5% 21,7% 4,5% ■Comer. ■Commer. 4,0% ■Comun. 75,6% 12,2% ■Commun. 16,0% ■Finan. 10,0% ■Finan. ■Inmob. 0,1% 15,0% 4,7% 19,0% Real state. ■Act. prof. 3,2% 4,2% ■■■AA.PP. Prof.act ■ Ocio Source: AFI, INE 8#9Geopolitical risks at the start of 2022 slowed the pace of recovery The regional economy continued its recovery in 4Q2022, according to the latest data, although on a QoQ rate slowed again (+5,0%, two points above the national average). The economy of Madrid recorded a quarter-on-quarter growth rate of 0,1% in 4Q2022. The community of Madrid closes 2022 very favorable, recovering pre-pandemic levels of wealth. GDP (%) Annual change rate (YoY) GDP (%) Quarterly change rate (QoQ) 30,0 20,0 10,0 0,0 -10,0 -20,0 -30,0 -2,74,7 25,4 -2,0.4,4 -5,5 -9,09,2 -9,5 T -21,9 -24,0 25,0 20,2 20,0 16,6 17,9 15,0 4,94,2 6,65,06,96,77,86,3 10,0 4,8 5,0 4,5 1,7 2,7 5,0 1,4 0,6 0,0 -0,1-0,8-0,2 -5,0 -4,4-5,5 -10,0 -15,0 -20,0 -25,0 -17,8 -21,3 I 2020 || 2020 III 2020 IV 2020 2021 2021 III 2021 IV 2021 2022 II 2022 III 2022 IV 2022 Data adjusted for seasonality and calendar effect * Closing estimate Source: CRTR (IECM) y CNTR (INE) 3,1. 0,5 1,32,32,4 2,31,5, -0,2 0,10,20,1 0,2 12020 II 2020 III 2020 IV 2020 2021 2021 III 2021 IV 2021 2022 || 2022 III 2022 IV 2022 Data adjusted for seasonality and calendar effect * Closing estimate ■C.Madrid ■Spain Source: CRTR (IECM) y CNTR (INE) 9 ■C.Madrid ■Spain#10Sectorial analysis: Asymmetrical impact of the crisis On the supply side, all non-agricultural sectors show year-on-year growth during the 2022. The services sector recorded an increase of 5,2%, 1 point below Q3, industry and the construction sector decelerated by two tenths and two points, respectively, to 5,3% in the case of industry and 2.2% for construction. Compared to precovid levels, industry is the best positioned sector (1.4% higher than 2019 levels). Moreover, the services sector still has room to recover. Interannual change (%) of main sector 2020-Q42022 110,00 100,00 90,00 80,00 Major sectors in the Community of Madrid Index IV-2019=100 70,00 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 40,0% 30,0% 20,0% 10,0% 0,0% -10,0% -20,0% -30,0% -40,0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2020 2021 2022 ■Agriculture ■Industry Construction Services -Agriculture ―Industry Construction Services -GDP Interannual change (%) of main sector for Q4 2022 5,3% 5,2% 2,7% 2,2% Source: IECM Agriculture Industry Construction Services 10#11Recovery continues in the services sector Service breakdown in the Region Index IV 2019=100 Detail of the services components YoY change (%, Q42021/2020 and 4Q2022) 15,0% 13,2% 110,00 10,8% 9,0% 10,0% 100,00 5,5% 6,1% 5,4% 5,9% 4,4% 4,9% 5,0% 90,00 2,4% 3,3% 3,4% 3,1% 0,5% 0,0% 80,00 -5,0% 0,1% -2,7% -1,4% 70,00 -10,0% 60,00 -15,0% 50,00 -15,4% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 -20,0% Distribution and hospitality Business and financial Other services -Distribution and Hospitality Business and financial services Other Services Services services 4Q2020 4Q2021 Source: IECM 1Q2022 2Q2022 3Q2022 4Q2022 Among tertiary activities, distribution and hotel and catering services continue to register the most dynamic year- on-year growth, although moderating with respect to the previous period, with a YoY rate of 6,1% (and still with room to recover precovid levels). Business and financial services advanced by 5,9% year-on-year, also slowing down compared to the previous quarter. The other services activities increased by 3,1% YoY and consolidated its recovery (+1,5% pre-pandemic). 11#12wwwwww Community of Madrid: Key sectors Banking, insurance, and fintech • • 96.01% of Spanish foreign investment in financial services in 1Q- 3Q202020 (92.3% in 2020). 34.84% of those employed in the financial and insurance sector out of the national total work in Madrid in 3Q2022. Pharma & Biotech • • 12.73% of the turnover of the Spanish pharmaceutical sector in 2021. 44.5% of the turnover of the Spanish biotechnology sector in 2019. Aeronautical & Aerospace • • 93.92% of the turnover of the Spanish aerospace sector in 2020. Madrid concentrates 25% of the companies in the aeronautics and aerospace sector in the country. Content & Video Game Industry • 40% of the turnover of the Spanish content and video games sector in 2021. IT & Communications • 91.13% of the turnover of the Spanish communications sector in 2020. • 62.9% of the turnover of the Spanish ICT sector in 2020. www www. Startup Ecosystem • Madrid receives the European Innovative Region 2022 award at the Digital Enterprise Show. • • • According to the European Commission's Regional Innovation Scoreboard 2021 report, Madrid is one of the most innovative regions in Spain and Europe, concentrating 21% of this type of companies in the country. Logistics 70% of logistics companies operating in Spain are headquartered in Madrid in 2022. It has one of the largest logistics stocks in 2021, reaching 11,315,000 m2. Design and graphic arts • • Second region by number of companies in this sector (more than 3,700 - 21% of the total), behind only Catalonia (22%) in 2022. +11.86% of manufacturing affiliation in 2021-20. Higher Education • • The largest number of students in Spain (more than 350,655) in the academic year 2021/22 and one of the largest in Europe. 6 public and 12 private universities and some of the best business schools according to FT (ESCP Business School, IESE, IE). Sustainable mobility • • 35.2% of the electric vehicles registered in Spain in 2021 are in the Community of Madrid. 61% of work trips made in 2020 were made using sustainable modes. 12#13☐ Investment and consumption evolution Economic growth in the Region in 4Q2022 was mainly slowed by the lower investment growth. The evolution of household and public consumption remains stable throughout the 2022 period. 30,0 20,0 10,0 30,0 20,0 YoY growth of investment components (%) 10,0 0,0 -10,0 -20,0 YoY Regional Demand Growth by components -30,0 -40,0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2020 -Investment 2021 Housing investment 2022 Other investment 6,7 YoY growth of consumption components (%) 3,7 40,0 0,0 3,1 30,0 20,0 -10,0 10,0 0,0 -20,0 -10,0 -20,0 -30,0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q -30,0 2020 2021 2022 -40,0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Regional demand Investment Final consumption expenditure 2020 2021 2022 Source: IECM Final consumption expenditure Households AAPP and ISFLSH 13#14Strong contribution of the regional demand Madrid's economy slightly slowed its recovery in the fourth quarter of 2022. Economic growth in the Community of Madrid during 2021 and 2022, has been driven mostly by the contribution of regional demand (3,4% YoY.), in contrast to the lower contribution of external demand (1.9% YoY.). Household consumption decreased in 4Q22 to 3,10% (2,3 percentage points lower than the previous quarter). 25,0 20,0 15,0 10,0 5,0 0,0 -5,0 -10,0 -15,0 -20,0 -25,0 Contribution to YoY GDP Growth 3,4 1,6 3,70% YoY growth of regional demand and its components in Q42022 (%) 6,70% 3,10% 3,6% 1,9% 1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q Regional demand Investment Final consumption expenditure Households AAPP and ISFLSH 2017 2018 2019 -Regional demand contribution 2020 -External demand contribution 2021 2022 Source: IECM 14#15Inflation is among the lowest among Spanish regions Inflation in the Community of Madrid increases in April to 3.4%; core inflation stands at 5.5%. Inflation increased by 8 tenths with respect to the previous month as a result of the increase in the prices of Clothing and footwear (+5.3%), which contrasts with the decrease in Housing prices (-1.8%). Additionally, it is expected that in the coming months the restrictive monetary policy will support a reduction in inflation. The Community of Madrid presents the most contained inflation in the national environment, being the region that loses the least purchasing power, which supports final consumption levels to remain stable. Contribution to inflation by components Community of Madrid Inflation Regional peaks and troughs, Community of Madrid and Spain 10.0 8,0 6,0 00 4,0 2.0 0,0 -2.0 aug-20 sep-20 oct-20 nov-20 dec-20 jan-21 feb-21 mar-21 apr-21 may-21 Jun-21 ju-21 aug-21 sep-21 oct-21 nor-21 Source: Own elaboration based on INE data Unprocessed food BINE -Underlying dec-21 jan-22 feb-22 mar-22 apr-22 may-22 Jun-22 Energy products ■Services dec-22 feb-23 mar-23 Processed foods -General inflation 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0.0 -2,0 -4,0 abr.-20 may.-20 jun.-20 jul.-20 ago.-20 sep.-20 Oct-20 nov.-20 dic.-20 D ene.-21 feb.-21 mar.-21 abr.-21 may.-21 jun.-21 jul.-21 ago.-21 sep.-21 oct.-21 nov.-21 dic.-21 ene.-22 feb.-22 - mar-22 abr.-22 ene.-20 feb.-20 mar.-20 Source: INE may.-22 jun.-22 jul.-22 ago.-22 sep.-22 nov.-22 dic.-22 feb.-23 mar-23 abr.-23 - Total ■C. Madrid 15#16Growth estimates of the Community of Madrid in 2023-2024 On average, average growth in the Community of Madrid is expected to be 1,6% by 2023, in line with the national average. GDP growth forecasts. Community of Madrid and Spain Real GDP growth rates Summary of projections 2023 Rates of change of real GDP* 1,6 C. Madrid 4,00 1,5 3,50 3,00 Spain ■■BBVA Research mar-23 Hispalink CEPREDE mar-23 I Average Summary of projections 2024 Rates of change of real GDP* 250 2,5 2,00 1,50 1,00 0,50 0,00 C. Madrid BBVA Research mar 23 CEPREDE abr 23 Spain 2.2 Hispalink dic-22 -Promedio Upward drivers ✓ Effectiveness of monetary policy measures adopted in anchoring inflation expectations. ✓ Agents' confidence in a context of high levels of uncertainty. ✓ Transfer and implementation of funds from the Recovery and Resilience Mechanism and REACT EU. ✓ Recovery of the labor market that will translate into progress in employment. ✓ Cohesion of the European Union and its positioning in the new global geopolitical framework. Downward drivers × Evolution of the war in Ukraine. × Complex geopolitics and its implications. × Generalized weakening of global demand. × Financial instability. 16 9 9 9 3 3 20 18 12 10 08 06 02 16#17Supportive labor market performance in 2022 and early 2023 The labor market continues to evolve very favorably and maintains important year-on-year advances in enrollment, compatible with significant reductions in unemployment in April 2023 (-5.9%), improving on pre-pandemic levels. The Community of Madrid recorded its best ever number of employees in April-23, with 3,547,671 people affiliated to Social Security (+4.2% y.o.y) Likewise, the unemployment rate (EPA survey data, unofficial unemployment figures) in 1Q22 at 11,01, and well below the 2020 peak rate above the 13% mark. With a total population of 6.825.005 (out of a national total of 47.615.034 EPA Unemployment Rate Community of Madrid and Spain Registered unemployment and Social Security Affiliations 20 18.1 15 10 4,7 5 3,4 2,7 -1,3 -5 -4.4 -10 -15 -20 -25 -25,2 -23,5 (YoY %) Afiliation Registered unemployment -30 2019 2020 2021 2022 dec- apr- 21 22 Source: MISSYM y MTYES 66 Activity rate Community of Madrid and Spain nov- dec- jan- 22 22 23 63.9 63,8 64 63,4 63,5 63 63,1 63,21 63,29 62,9 62 60,5 60 59,1 58,7 58,7 58,5 58.9 58,52 58,55 4,2 18,0 16,3 16,1 16,0 16,0 15,3 15,3 14,6 14,4 13,7 60 58,7 14,0 13,3 13,5 13,3 12,6 12,2 12,1 11,8 11,9 12,0 12,5 12,7 12,87 13,26 11,7 11,51 58,2 58 11,01 10,6 10,1 10,2 10,0 56 8,0 54 6,0 52 4,0 2,0 0,0 1-20 11-20 III-20 IV-20 1-21 II-21 -21 IV-21 1-22 II-22 III-22 Iv-22 1-23 Source: EPA, INE ■C. Madrid ■Spain 55,5 50 IV-19 1-20 II-20 III-21 IV-21 1-22 II-22 III-22 IV-22 1-23 Source: EPA, INE ■C. Madrid ■ Spain 17#18Madrid led business creation at the beginning of 2023 The Community of Madrid maintains its leadership in terms of company start-ups with a total of 2.389 in March 2023. In terms of percentage over the national total, the Community of Madrid leads with 23,53%, followed by Catalonia (18.29%). The evolution of company start-ups at the beginning of 2023 exceeds the levels recorded in previous years. Commercial companies created (Percentage over the national total March 2023) Companies set up montly Community of Madrid Resto de España 41,9% Andalucia 16,3% Source: Community of Madrid, INE 3.000 C.de Madrid 23,5% 2.500 2.000 1.500 1.000 Cataluña 18,3% 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2021 2022 2023 18#19Madrid, preferred destination for foreign investment wwww During 2022, the Community of Madrid received an investment of 17,225.8 million euros, 50.4% of the national total. Castille and Leon Andalusia 1,7% Principalit 1.4% 3,5% Balearic y of Asturias 1,6% 1,5% Navarre 8.5% Source: Ministerio de Industria, Comercio y Turismo Valencia 11,4% Community of Madrid Catalonia 16,1% 50,4% 19#20Exports Comunity of Madrid (Mill.€) 59.079 40.368 29.470 31.179 29.963 30.001 28.760 10.000 20.000 30.000 40.000 50.000 60.000 70.000 Full year Acumulated feb www wwww International trade at record highs Accumulated exports through December reached €59,079 million, which represents a record high in 2022. The evolution at the beginning of 2023 is very favorable, even surpassing. the levels recorded in 2022. Imports exceeded the levels of previous years, with al cumulative figure up to the end of the year of 110,618 M€. In February 2023, imports followed the same path as that recorded in the same month of 2022. In terms of products, pharmaceuticals and fuels are driving up domestic exports in 2022 y 2023. On the import side, the energy component is the most relevant one. 2023 9.659 2022 2021 2020 2019 2018 2017 2016 0 Source: AEAT Imports Comunity of Madrid (Mill.€) Evolution of the 5 most exported TARIC sectors (accumulated Feb) 2023 15.763 2022 110.618 2021 82.921 7.000 2020 63.080 6.000 5.000 29 ORGANIC CHEMICAL PRODUCTS 2019 64.591 ■ 87 MOTOR 2018 VEHICLES, 61.643 4.000 TRACTOR ■84 MACHINES AND 2017 60.862 MECHANICAL 3.000 DEVICES 2016 58.363 2.000 1.000 ■27 FUELS, MINERAL OILS 0 20.000 40.000 60.000 80.000 100.000 120.000 30 PHARMACEUTICAL Full year Acumulated feb PRODUCTS Source: AEAT 0 feb.- feb.- feb.- feb.- 16 17 18 19 21 feb.- feb.- feb.- feb.- 20 22 23 Source: Comunidad de Madrid and INE Source:AEAT 20 20#21www Investment in R&D remains strong 4,538 M€ of R&D investment in the Community of Madrid (2021). Basque Country Madrid Investment in R&D as % GDP (2021) +6.7% growth over the previous year. 26,3% of total Spanish R&D expenditure (first region in terms of expenditure). Second region in investment as a % of GDP (1,9%), +50 basis points compared to the national average. Castile - Leon Andalusia 2,3% 1,9% Navarre Catalonia Total 1,9% 1,8% 1,4% 1,4% Valencia 1,2% Galicia 1,1% Murcia 1,1% 1,1% Aragón Cantabria Asturias Castile la Mancha Rioja 1,0% 1,0% 0,9% 0,8% 0,8% Extremadura Canary Balearic 0,7% 0,6% 0,5% Source: INE 21#22wwww Negative fiscal results in 2022, although more contained than the regional average The historical fiscal discipline of the Community of Madrid has allowed the region to record a financial balance better than the national average. The lower volume of transfers from the State resulted in a decrease in non-financial resources in contrast to the higher rate of growth in spending, which caused the Community of Madrid to record a deficit of 0.7% of GDP as of Dec-22 (compared to - 1.1% of GDP for the regional average). Deficit evolution by Autonomous Regions as % of GDP ■2021 end-closed 2022 end-closed 0,5 0.0 Evolution of the public deficit (% GDP) 0,3 0.0 0,0 -0.5 -0,3-0,3-0,1 -0.2 -0,4 -0.5 -0.6 -0.7 -1,0 -0,9 -1.0 -1,0 -1.5 -1,6 -2,0 -1.8 -1,8 -2.0 -2,5 -0.7 -1,1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ■C. Madrid Spain *Year-on-year change in non-interest income and expense as of Dec-22 (%) 11,8% NAV PVA 2,3% 0,1% RIO GAL -1,3% CNT -2,2% -3,2% AST ■Y.o.Y. non- financial -3,4% ARA expenses (%) -4,0% AND -5,4% TOTAL ■Y.O. Y non- -5,5% financial income (%) CVA -6,6% MUR EXT -7.1% -7.4% MAD CAT -7,8% -8,9% CYL CLM -9,3% -10,7% BAL CAN -11,1% -20% -15% -10% -5% 0% 5% 10% 15% 20% Source: Ministry of Finance *Note: Data obtained from the budget execution of the Autonomous Regions at the end of 2022.. 22 22#23■February 2022 ■February 2023 C. Valencian.48 -0,27 -0.32 Murcia -0,31 Castilla la Mancha -0.29 '0- Baleares -0,28 0,38 Madrid 0,16 80'0- Cataluña -0,12 0,03 Source: Ministry of Finance 60'0- -0,01 800- -0,05 -0.04.■ Cantabria Total CC.AA. Extremadura Canarias www. 0,35 0.011 10.8108 Expected improvement in fiscal dynamics in 2023 The higher volume of transfers from the State in the form of payments on account enabled the Community of Madrid to obtain a lower deficit than that recorded in the same period of the previous year (-0.08% GDP Feb-23 vs -0.16% GDP Feb-22). Deficit evolution by Autonomous Regions as a % of GDP *Year-on-year change in non-interest income and expenditure to Feb-23 (%) Andalucia Castilla y León ■ 0,04 Rioja 0,03 Aragón 0,06 -0,03 Galicia 8:14 Asturias 0,29 0,14 0,24 País Vasco 0,16 0,63 Navarra -0,18 CVA 2,4% 4,5% 5.5% 6,9% 7,4% 8.2% AND GAL ARA MAD PVA ■Y.o.Y. non-financial CAN 8,3% expenses (%) TOTAL 8.5% AST 9.3% 10,0% ■Y.o. Y non-financial income (%) CLM MUR 10,0% EXT 10,5% 10,9% RIO 11,7% CYL NAV 13,6% CAT 13,6% BAL 14,0% 20,8% CNT -0,1 0,0 0,1 0,1 0.2 0,2 0.3 0,3 0.4 0,4 *Note: Data obtained from the budget execution of the Autonomous Regions as of January 2023. 23 23#24Autonomous Regional Financing System and additional transfers By 2023, the Autonomous Regions will receive an amount of 134,336 million euros (+24 y.a.): 124,292 million euros in interim payments, plus 10,981 million euros from the positive liquidation of the 2021 financial year. These resources will enable the regions' budgetary situation to improve significantly, in an environment where the reference rate for the Autonomous Regions has eased to -0.3% of GDP and in the absence of extraordinary transfers. State account transfers, 2019-23 (EUR mn) Extraordinary transfers in 202-2022 (Єm) 2022 2019 Catalonia Galicia Andalusia 19.020 7.431 19.218 2020 2021 2022 2023 2023/2022 2023/2019 19.685 19.711 21.057 23.380 11,0% 22,9% 7.595 19.748 7.557 8.080 8.788 19.636 20.943 23.245 8,8% 18,3% 2017 VAT liquidation Estimated 2020 liquidation 2021 Extraordinary Fund 2020 Covid Fund Andalusia 11,0% 21,0% Aragon -537 -80 -1.261 2.358 2.199 -278 403 431 Asturias 2.740 2.794 Cantabria 1.805 1.845 1.842 1.987 2.761 2.924 3.216 2.159 10,0% 17,4% Asturias -86 -150 308 299 8,7% 19,6% Balearic -78 0 330 438 Canary Islands 0 0 629 551 La Rioja 971 998 992 1.071 1.165 8,8% 20,0% Cantabria -46 -146 168 177 Murcia 3.138 3.259 3.220 3.412 3.812 11,7% 21,5% Castile and Leon -182 -373 741 843 Valencia 9.433 9.788 9.731 10.270 11.653 13,5% 23,5% Castile La Mancha -130 -369 605 743 Catalonia -443 -538 2.161 3.171 Aragon 3.540 3.646 3.630 3.860 4.275 10,8% 20,8% Extremadura -86 -213 318 277 Castile-La Mancha 4.923 5.056 5.016 5.333 5.917 10,9% 20,2% Galicia -204 -392 828 735 Canary Islands 4.540 4.740 Extremadura 3.069 Balearic 1.980 Madrid Castile and Leon TOTAL 14.432 6.494 102.735 4.703 5.047 3.123 3.096 3.315 2.096 2.092 2.148 14.814 6.617 105.803 5.591 10,8% 23,1% Madrid -377 -496 1.864 3.346 Murcia -85 -86 422 389 3.613 9,0% 17,7% Rioja -20 -104 94 127 2.479 15,4% 25,2% Valencia -281 0 14.993 15.755 17.287 9,7% 19,8% Total -2.635 -4.407 1.400 12.629 1.486 15.212 6.542 6.936 7.635 105.523 112.138 124.215 10,1% 17,6% Excess announced -465 0 0 10,8% 9,2% Announced transfers* -3.100 -4.407 12.629 15.212 Source: Ministry of Finance * For 2022, the negative sign refers to the loss of the regional governments to be compensated by transfers. 24#25Deficit forecasts for 2022 and 2023 The lower transfers received from the State in 2022 compared to the extraordinary funds approved in the previous year, will impact the public accounts of the Community of Madrid, with an expected deficit in line with the regional reference target of 0,6% and still significantly below the national average. With respect to 2023, the deficit forecast improves substantially due to the increased resources that will be transferred from the Regional Financing System. Deficit for 2021 and forecast for 2022 and 2023 (% GDP) Clousure 2021 AlReF CC.AA. Andalusia 2021 2022 2023 -0,2% -1,0% -0,1% Aragon -0,2% -0,6% 0,1% Asturias 0,9% -0,6% 0,4% Balearic 1,2% 0,0% 0,6% Canary 0,5% -0,6% 1,1% Cantabria 0,9% -0,5% 0,0% Castile and Leon -0,1% -0,9% 0,3% O Castile La Mancha 0,3% -1,4% -0,3% Catalonia 0,3% -1,3% -0,5% Extremadura 0,2% -1,1% 0,0% Galicia -0,2% -0,6% 0,4% Madrid 0,3% -0,7% 0,0% Murcia -1,4% -2,7% -1,4% Navarre 1,3% 0,6% 0,1% Basque Country 0,8% 0,4% 0,2% Rioja 0,03% -0,2% 0,1% Valencia -1,2% -2,6% -1,0% Regional Government -0,03% -1,0% -0,1% Source: Deficit of AIREF GDP % 25 25#26A flexible tax regime that drives competition and dynamism The Community of Madrid's policy on regional taxes aims at a flexible tax regime that favors the creation of companies and economic dynamism. Comunidad of Madrid PIT Wealth tax Tax rate Only taxed over Tax rate Tax rate Inheritance tax Bonuses Inheritance and Gift tax Gift tax WTT Wealth Transfer Tax and Stamp Duty SD Tax rate Bonuses Tax rate Tax rate 18.5-43.5% 700,000 € Discount of 100% 7.65-34% Groups I y II: 99%; Group III: 10-15% 7.65-34% Groups I y II: 99%; Group III: 10-15% 6% 0.75% *Maximum deductible amount Source: Community of Madrid. Catalonia Andalusia 21.5-48% 500,000 € 0.21-2.75% 19.5-48% 700,000 € 7-32% 0.24-3.03% 7.65-36.50% Groups I y II: 99%-20% Groups I y II: 5-9% Groups y ll: 1.000.000€*; Group III y IV disabled people: 250.000€* 7.65-36.50% Castile and Leon 19-44% 700,000 € *Note: It should be noted that 0.2-2.5% the tax rates and deductions 7.65-34% shown in the following table are Groups I y II: 100- of general application. However, 80% the tax regulation establishes other deductions with a more residual application. 7.65-34% 10-11% 1.50% Features: 8-9-10% 1.50% 8-10% 1.50% Tax actions 2022 / 2023: 1) Tax incentive to attract new foreign investors (new as of January 2023). 2) A half-point reduction in all regional personal income tax brackets. 3) Abolition of all taxes levied by the Community of Madrid. 4) Deflation of personal income tax. 5) Law on tax deductions to promote births, support for families and access to housing. 6) Allowance for inheritances between siblings, aunts, uncles and nephews of 25%. Setting up a 20% deduction in personal tax liability on the investment made ( no minimum investment and is applicable to all types of assets). Minimum tax deduction of 6 years. Objectives: Boost savings and investment. Encourage new companies to set up, while helping those already operating to grow. Bolster Madrid's position as a benchmark for international investment to counteract the negative effects of the creation of the New Tax on Large Fortunes. 26#27The region of Madrid is the region with the highest tax competitiveness index ( RTCI) The Regional Tax Competitiveness Index (RTCI) makes it possible to evaluate, measure and compare the tax system of the different Autonomous Communities, with the aim of analysing the structure of the tax system in each one of them. Regional Tax Competitiveness Index (RTCI 2021) Pais Vasco Álava 7,08 Guipúzcoa Vizcaya La Rioja 6,92 7,13 6,06 Asturias 5,17 16° Cantabria 5,93 11 3* 2º 8° Galicia 5,90 Navarra 5,71 14" 126 Castilla y Leon 6,33 Aragón 5,14 17" Cataluña 4,63 19° ☐ The RTCI is a hierarchical index made up of five taxes (Income, Wealth, Inheritance, Inheritance, Transfer Tax and Stamp Duty, and the autonomous community taxes) that assesses specific indicators of each of these taxes. the In 2021 the most fiscally competitive Autonomous Community was Madrid with a value of 7,19, followed by the Basque Country and the Canary Islands. Catalonia in in last place with 4,63. Low Madrid 7,19 1° C.Valenciana 5,08 Extremadura 5,44 15" Castilla-La Mancha 5,99 10 18 Baleares 5,81 13" Score Andalucia 6,12 7* Murcia 6,02 9° Canarias 6,35 High Source: Foundation for the Advancement of Liberty. 27 27#2828 28 wwwww wwww wwww Economic strengths of the region The economic dynamism registered during the year 2021 has continued during the first half of 2022, although a slight slowdown is perceived in the third quarter. Nevertheless, the Community still has room for improvement in the recovery, especially in the services sector. Significant contribution of domestic demand to the region's growth, focused on household consumption and investment. Moderate inflation rate compared to other regions, allowing consumer purchasing power not to be excessively eroded, maintaining a positive outlook for successive quarters. Leadership in the creation of new companies. A diversified productive structure with a large presence of larger companies. The good relative performance of the labor market. Madrid has one of the highest percentages in higher education in Spain (40,8%). In addition, in 2022, 2.450.59 employment contracts were signed in Madrid, +2,7% more than in the previous year. In April-23, the Community of Madrid recorded its best-ever number of employees, with more than 3.5 million Social Security affiliates. Madrid is the most deregulated and lowest taxed economy in Spain and the most open to foreign trade and investment. The beginning of the year 2023 has evolved favorably in terms of the number of commercial companies created and in exports, both exceeding the levels reached in the same periods of previous years.#29Competitive advantages Sector Weights breakdown of Spanish regions Services Wholesale & Retail commerce. Information & CCAA Farming Industry Construction hospitality. vehicle repairs. Communication activities Finance & Insurance activities Real Estate activities Scientific activities and auxiliary Technical & Public Administration. Defense. Social Art. Culture and Security. Entertainement. Total Services Education. activities. transport. services Healthcare and storage. Social Services Andalusia 8% 12% 7% 23% 2% 4% 13% 6% 22% 5% 74% Aragon 7% 21% 6% 21% 2% 4% 11% 6% 19% 4% 66% Asturias 1% 20% 7% 22% 2% 4% 13% 7% 19% 5% 72% Balearic 1% 6% 8% 37% 2% 3% 15% 9% 15% 5% 86% Canary Islands 2% 6% 6% 35% 2% 3% 13% 8% 20% 6% 86% Cantabria 2% 22% 7% 21% 2% 3% 14% 6% 19% 5% 70% Castile and Leon 4% 20% 7% 20% 2% 4% 11% 6% 22% 4% 70% Castile La Mancha 10% 19% 7% 19% 1% 3% 11% 4% 21% 5% 64% Catalonia 1% 19% 5% 25% 3% 4% 12% 10% 15% 5% 74% Comunitat Valenciana 2% 19% 7% 25% 2% 4% 13% 7% 17% 5% 72% Extremadura 10% 13% 7% 19% 1% 4% 11% 5% 26% 4% 70% Galicia 5% 18% 7% 23% 2% 3% 10% 7% 19% 4% 69% Community of Madrid 0% 10% 5% 24% 10% 6% 10% 15% 15% 5% 85% Murcia 6% 18% 6% 24% 1% 3% 10% 6% 20% 4% 69% Navarre 4% 30% 6% 19% 2% 3% 9% 7% 16% 4% 60% Basque Country 1% 24% 7% 21% 3% 3% 11% 8% 17% 5% 68% Rioja 7% 26% 6% 19% 2% 4% 10% 5% 17% 4% 61% Ceuta 0% 5% 5% 21% 1% 2% 10% 4% 47% 4% 89% Melilla 0% 4% 6% 19% 1% 2% 11% 5% 47% 4% 90% SPAIN 3% 16% 6% 24% 4% 4% 12% 9% 18% 5% 75% Higher exposure than the average to the service sector (85%) that has benefited from the post-pandemic recovery boost. Less weight than average in construction; a very labor intensive sector and very sensitive in terms of unemployment rates in recessions and stress scenarios. Leader among other regions in activities that will drive structural higher growth rates in the future such as: information, communications, finance, IT, scientific activities, etc 29 29#30www www Competitive advantages In 2022 (latest available data), the Community of Madrid recorded a competitiveness index higher than not only Spain but also some EU countries such as France, Italy and Portugal. It is also positioned as the most attractive Spanish region to live and work in, followed by the Basque Country and Catalonia. The Community of Madrid is the European region with the best public health indicators. EU Regional Competitiveness Index (2022) Technological readiness. INNOVATION SUB- INDEX Business sophistication Market size Labour market RCI 2.0 2022 Innovation BASIC SUB-INDEX 175 150 125 100 75 50 25 Institutions Macroeconomic 0 Infrastructure Higher education and LLL EFFICIENCY SUB- INDEX Basic education ES30: Comunidad de Madrid EU average Country average (ES) Source: European Comission. Health Index (EU27-100) <= 50.0 50.1 75.0 75.1 90.0 90.1 100.0 100.1 110.0 110.1 125.0 125.1 140.0 140.0 30 30#31CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid II. FUNDING PROFILE AND STRATEGY#32Normative protection of Debt payment The Comunidad de Madrid's debt is included in the scope of State debt Article 135 of the Constitution states ... ". Loans to meet payment on the interest and capital of the State's Public Debt shall always be deemed to be included in budget expenditure and may not be subject to amendment or modification as long as they conform to the terms of issue.". In terms of Organic Law Article 14.5 of the Law on Financing of the Autonomous Communities states: "The public debt of the autonomous communities and the securities of an equivalent nature issued by them shall be subject, to the same rules and shall enjoy the same benefits and conditions as the Public Debt of the State". Article 14 of the Organic Law 2/2012 of 27 April on Budgetary Stability and Financial Sustainability provides: "The payment of interest and principal on the debt of public administrations shall have absolute priority over any other expenses" In practice, the Spanish Government has provided financial support to regions that have experienced budgetary difficulties or access to the financial market ✓ Since 2012 the Treasury has implemented mechanisms such as the FLA (Autonomous Liquidity Fund) and FFPP (Payment Provider Fund) to provide liquidity to the regional governments and local authorities to enable them to cope with their payment obligations (Royal Decree-Law 17/2014). Ultimately, the Government of Spain is the ultimate guarantor of debt amortization. 32 32#33Debt ratios of the Comunidad de Madrid The Comunidad de Madrid has strong credit fundamentals, putting it in a very favourable starting position to face the current economic and health crisis. These debt ratios mean that the Community's cost of financing is very favourable. As a result, the Community has opted for greater financial autonomy (similar to the strategy of the Foral Regions), having repaid early in 2020 all the outstanding capital concentrated in the FFCA (unlike other regions where more than 80% of its debt is state-funded). 2022 4Q CCAA Debt Debt/GDP (€ mill.) (%) 40 Comunidad de Madrid 34.820.918 13.5 País Vasco 10.821.298 35 13.7 Canarias 6.515.995 13.9 30 Comunidad Foral de Navarra 3.157.866 14.1 25 Principado de Asturias 4.217.217 16.4 La Rioja 1.614.838 17.0 20 Galicia 11.977.391 17.2 15 Castilla y León 13.322.032 20.8 10 Andalucía Aragón Cantabria Extremadura 37.870.123 21.4 8.957.130 21.5 5 3.377.802 22.2 5.136.574 23.2 Illes Balears 8.873.526 26.6 dic 11 dic 12 dic 13 dic 14 Región de Murcia 11.395.148 32.2 Castilla-La Mancha 15.519.529 33.4 Cataluña 84.327.402 33.4 Comunitat Valenciana 55.031.842 44.4 National Average 316.936.631 23.9 Source: Bank of Spain ⚫CCAA dic 15 dic 16 dic 17 dic 18 dic 19 dic 20 CyL CAT MAD PVA dic 21 mar 22 Evolution Debt / GDP (%) jun 22 sep 22 dic 22 33 13,7 13,5 23,9 20,8 33,4#34Gross Financing Needs 2023 2,680MM ⚫ Refinancing of long-term debt redemptions in 2023 55 MM 802 MM ⚫Déficit 2023 (0.3 % Regional GDP) 1MM TOTAL FUNDING NEEDS 2023: 3,538 MM • Negative settlement 120 monthly payments (DA 36th, Law 2/2012, 29 june) • Agencia Vivienda Social, (Lt) debt TOTAL ISSUED 2023: 2,785 MM (78.72% TOTAL NEEDS) 34 =4#352023 Debt Strategy 1. Funding needs: EUR 3,6 bn 2. EUR Benchmarks transactions. 3. Preference for medium and long maturities. 4. Smooth the maturity profile towards longer term financing. 5. Promote Sustainable Finance: ➤ Capacity to issue bonds and loans. ➤ Public and private deals. ➤ In compliance with the GBP and SBP and aligned with the SDG. 35 35#36Rating and debt ratios Moody's S&P DBRS FITCH Baa1 A A BBB+ Current Rating Outlook Date Stable 11 May 22 Stable Stable 4 Nov 22 24 Feb 23 Stable 28 Apr 23 Comunidad de Madrid National Total 2019 2020 2021 2022 4Q 2019 2020 2021 2022 4Q Debt/GDP (%) 13.8 Debt 33,469 15.8 34,601 14.7 34,409 13.5 34,821 23.7 295,080 27.2 303,992 25.9 312,588 23.9 316,937 Comunidad de Madrid 2019 2020 2021 2022 4Q 2019 Spanish Tresury 2020 2021 2022 4Q Debt Average Cost (%) 2.19 1.91 1.86 2.09 2.21 1.87 1.65 1.73 LCR (Liquidity Coverage Requirement): NIVEL 1 EUROCLEAR.ECB 0% risk weighted. Minimum risk applicable in accordance with European Prudential Regulations The average cost of Comunidad de Madrid is 2.27% (April 2023) Source: Comunidad de Madrid, INE and Bank of Spain Considering rights and obligations *Cost: Spanish Treasury 36#37The main characteristics of the debt Loans Distribution bonds/loans Type % Currency distribution Public entities Private entities 23.30% 76.70% Total % Loans 39.53 Bonds Bonds 60.47% Loans 39.53% Type Euro Foreign currency % 100.00 0.00 Euro 100% Total % Bonds 60.47 Distribution fixed/variable Fixed 88.62% Floating 11.38 A commitment to fixed-rate issuances is a strength: - Reducing risks. - Reducing volatility when making payments. Maturity Distribution Long term 99.46% Short term 0.54% Source: Comunidad de Madrid. (*) SEC 2010 Update: 31/12/2022 *Public entities: European and Spanish (ICO) Financial Institutions *Private entities, Private Banks 37#38Funding Activity mill.€ 6.000 € 5.000 € 4.000 € 3.000 € 2.000 € - 1.000 € اااااااا 0 € 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ■ Bond Loans ■ Sustainable ■Green Health Social ■Social Loan Source: Comunidad de Madrid Madrid, regular player in Capital Markets. ■Financing Needs 2023 38 88#39Maturities profile mill. € 3.500 2.960 2.965 3.000 2.826 2.680 2.678 2.720 2.701 2.552 2.593 2.483 2.500 2.363 2.000 1.500 1.000 500 1.588 598 214 246 104 111 144 23 18 55 63 15 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Bonds Loans Source: Comunidad de Madrid 806 2.399 2039 2040 2041 2042 2043 2044 2045 2046 47-66 39 99#40Average cost and life ge % 4,5 3,96 4 3,82 3,90 3,61 3,53 3,5 6,92 6,96 6,85 3 2,79 6,17 2,43 6,41 2,5 5,5 5,51 2 5,34 1,5 8,33 7,67 7,39 Years 8,38 8,39 8,5 2,27 2,21 2,19 1,91 1,86 8 7,5 7 6,5 6 2,09 5,5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Comunidad de Madrid Average Cost -Average Life The average maturity of debt is 7.69 years (April 2023) 5 40 40#41Comunidad de Madrid: Benchmark Transactions mill. € 2.000 1.800 1.600 1.400 1.200 1.000 800 600 400 200 0 17107123 21/05/24 30/09/24 İ 30/04/25 ■Green Bond 30/04/27 30/04/27 30/04/28 Tap 30/07/28 30/04/29 31/10/29 12/03/30 Sustainable 30/04/30 30/04/31 30/04/32 30/04/33 Public Common features of these operations: • Extraordinary investor's response. Outstanding quality of the orderbook: Demand driven by real money investors. High international support, very well diversified in geographical terms. Source: Comunidad de Madrid 41#42Deals Breakdown 2023 Amount Tenors Average Maturity Loans Public Benchmark (Sustainable) 1,785,000,000 1,000,000,000 8-13 2,785,000,000 10-13 9.83 10.18 9.95 2022 Loans 2,174,000,000 5-30 11.17 Private Placements 100,000,000 20 20.00 Public Benchmark (Sustainable) 1,000,000,000 10.05 Public Benchmark (Green) 500,000,000 7.05 3,774,000,000 5-30 10.56 2021 Loans 751,000,000 10-13 11.62 Private Placements 380,000,000 28-40 31.45 Public Benchmark (Sustainable) 1,000,000,000 10.10 Public Benchmark (Green) 500,000,000 6.67 2,631,000,000 10-40 12.97 Source: Comunidad de Madrid 222 42#43€1bn 3.596% due 30th April 2033 BY REGIONS OTHER 5% SWITZERLAND 3% BENELUX 5% PORTUGAL 8% NORDICS 8% UK/IRELAND 8% ITALY 10% FRANCE 10% S • • 7° Sustainable Public Deal GERMANY 26% SPAIN 17% BY INVESTOR TYPE OTHERS 2% BC & 10 13% BANKS 15% INSURANCE COMPANIES AND PENSION FUNDS 25% TOTAL AMOUNT 1,000,000,000 € First public benchmark issued by Comunidad de Madrid in 2023. 83% placed outside Spain. Order book 6.2 billion euros with more than 160 accounts. ASSET MANAGERS 45% 25 43#44• 2023 Notes Issuance Program Operations Operation Amount € mill Settlement Date Maturity Date Notes 25,000,000 3/31/2023 6/30/2023 Notes 45,000,000 4/4/2023 6/2/2023 Notes 32,000,000 4/4/2023 7/3/2023 Notes 35,000,000 4/28/2023 5/29/2023 Notes 13,200,000 5/4/2023 11/10/2023 Total 150,200,000 The Note Issuance Program amounts to €1 bn. The nominal issue in 2023 is €240.2 million The outstanding amount of the Note Issuance Program is €849.8 million. Source: Comunidad de Madrid 44#45€1bn 1.723% due 30th April 2032 BY REGIONS OTHER 6% SWITZERLAND 6% NORDICS 3% ITALY 7% BENELUX 17% UK/IRELAND 8% 6° Sustainable Public Deal SPAIN 27% GERMANY/AUSTRIA 15% FRANCE 11% BY INVESTOR TYPE BANKS 39% OFFICIAL INSTITUTIONS 2% TOTAL AMOUNT 1,000,000,000 € First public benchmark issued by any Spanish Regions in 2022. • 73% placed outside Spain. 53% ESG investors. Source: Comunidad de Madrid ASSET MANAGERS 39% INSURANCE COMPANIES AND PENSION FUNDS 20% 45 45#46€500 bn 2.822% due 31 October 2029 BY REGIONS PORTUGAL 2% OTHER 4% SWITHERLAND 1% BENELUX 9% ITALY 14% UK/IRELAND 16% FRANCE 17% 3º Green Public Deal SPAIN 23% GERMANY/AUSTRIA 14% BY INVESTOR TYPE INSURANCE COMPANIES AND PENSION FUNDS 4% BANKS 33% OTHERS 16% ASSET MANAGERS 47% • Third public green benchmark for Comunidad de Madrid. • 77% placed outside Spain. • 51% ESG investors. This transaction is one of the few in Europe to be fully aligned with the EU Green Taxonomy, and consolidates Madrid's leading position as ESG bond issuer. Source: Comunidad de Madrid 46#472022 Bond Profile BY REGIONS OTHER 5% PORTUGAL 1% SWITZERLAND 4% NORDICS 2% ITALY 15% BOND TRANSACTIONS BY INVESTOR TYPE OFFICIAL OTHERS 2% INSTITUTIONS 2% SPAIN 24% BANKS 35% GERMANY/AUSTRIA 14% BENELUX 13% UK/IRELAND 10% FRANCE 12% Source: Comunidad de Madrid AMOUNT ISSUED 1,600,000,000 € ASSET MANAGERS 35% INSURANCE COMPANIES AND PENSION FUNDS 27% 47#48CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid III. SUSTAINABLE BOND 2023 & IMPACT REPORT 2022#49Sustainability Mandate of the Community of Madrid Comunidad de Madrid has a clear social and environmental mandate to meet the needs of its citizens. Fostering inclusive growth is core for the Region, and so it is committed to integrate sustainable development and social responsibility in all its activities while playing a key role to promote sustainable initiatives on the territory. Social expenditures include several programs such as the financing of public polices related to public health, education, social services, employment promotion, public transportation, and subsidized housing. Comunidad de Madrid's expenditure on social programs aim to strengthen Madrid's socio-economic recovery and improve social cohesion, thanks to the development of public services that benefit all the citizens and the implementation of programs to promote employment through investment of small businesses. Strategy for Social Inclusion 2016/2021, within the framework of the Europe 2020 Strategy, which seeks to eradicate severe poverty from the region Comunidad de Madrid 2022 - Sustainability Strategy Highlights € 1.26 Bn Social Inclusion Projects Li 172 families Affordable Housing € 531 Mm 63,000+ patients High impact medicines for rare diseases Source: Comunidad de Madrid 49#50Sustainability Mandate of the Community of Madrid Comunidad de Madrid has an important environmental mandate. Almost 50% of the region area is protected due to its environmental protection and conservation value. The geo-economic situation in Madrid creates the need to implement policies for pollution management and waste treatment in densely populated urban areas. Guided by this purpose, the region set out its Strategy for Sustainable Waste Management for the 2017-2024 period. In relation with climate change and air quality, the Plan Azul+ 2013-2020 has been the backbone for eight years, particularly focusing in tackling pollution and promoting energy efficiency. Among the measures set out in the Plan Azul+, which is expected to be followed by a new Plan from 2021, we find the following objectives by sector, which are representative of the regions' general sustainable strategy: • . . • Transportation: Metro de Madrid is Spain's largest and Europe's third largest (third to London and Moscow) metro system with 302 stations spread over 294 Km. Comunidad de Madrid aims to modernise taxi and bus fleets with greener vehicles, improvement of bicycle infrastructure, fiscal incentives for the transition towards greener technologies in private transportation Industry: reduction of emissions from industrial activities, like NOX produced by cogeneration plants Residential/commercial/institutional: use of clean fuels for domestic heating, improvements in energy efficiency, smart grids Agriculture: sustainable management of forests, promotion and development of biomass energy 2021 - Emissions Avoided by 370,024 tCO2 Green Public R-2823 Transportation 國 Source: Comunidad de Madrid 50 50#51Contribution to the UN SDGS Comunidad de Madrid is committed to the implementation of the 2030 Agenda for Sustainable Development. In order to implement concrete actions, the project "Madrid is Action" has been established SUSTAINABLE GOALS DEVELOPMENT 17 GOALS TO TRANSFORM OUR WORLD WE SUPPORT 1 POVERTY GOOD HEALTH AND WELL-BEING W Affordable Housing (Target 1.4) Social Inclusion (Target 1.1 and 1.B) Healthcare (Target 3.8) Comunidad de Madrid THE GLOBAL GOALS For Sustainable Development SUSTAINABLE DEVELOPMENT GOALS (11) B Source: Comunidad de Madrid W 5 QUALITY EDUCATION GENDER EQUALITY DECENT WORK AND ECONOMIC GROWTH SUSTAINABLE CITIES AND COMMUNITIES CLINATE 13 ACTION Education (Target 4.1, 4.2, 4.4, 4.A) Social Inclusion - Fight against gender violence and promotion of equal opportunities (Target 5.1 & 5.2) Social Inclusion (8.6) SMEs financing (8.3, 8.6) Affordable Housing (11.1) Clean and Sustainable Transportation (11.2) Climate Change Policies (13.2, 13.3) LIFE ON LAND Environmental conservation and biodiversity (15.1, 15.2) 51#52Rationale for Sustainable Financing Community of Madrid' Sustainability Mandate Addressing the social and environmental transition Supporting the growth of a sustainable financial market Comunidad de Madrid devotes a substantial portion of its budget to social and environmental spending Via the issuance of sustainable debt, Community of Madrid contributes to its social and environmental policies and actions Alignment of the funding strategy with the sustainability strategy By issuing Sustainable Finance Instruments, Community of Madrid contributes to global, EU and national social and environmental objectives Contribution to the achievement of UN Sustainable Development Goals (SDGs) Achievement of sustainable growth for Community of Madrid's citizens Address the increasing demand for more sustainable assets by responsible investors Diversify its investor base targeting SRI and dark green investors, while fostering the relationship with existing investors Contribution to the development of a sustainable financial market Comunidad de Madrid believes that Sustainable Finance Instruments are effective tools to channel investments to projects demonstrating climate and social benefits 42 52#53Sustainable Finance Framework Alignment with the Standards The Sustainable Finance Framework of the Community of Madrid complies with: • ICMA Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines LMA Green Loan Principles ICMA 3 Use of Proceeds Project Evaluation and Selection Management of Proceeds Community of Madrid Framework's pillars • • Sustainable Finance Instruments' proceeds will be allocated to eligible expenditures with a clear social and/or environmental benefit within the General Budget Carried out by the Committee of Selection, Monitoring and Evaluation that meets before the issuance of a Sustainable Finance Instrument, in accordance with the Eligibility and the Exclusionary Criteria Sustainable Finance Instruments' proceeds will be managed in a portfolio approach The The Green Bond Principles Social Bond Principles 4 Reporting Loan Market The Sustainability Bond Guidelines Association Green Loan Principles 5 the authoritative voice Supporting environmentally sustainable economic activity of the EMEA market External Review Allocation and Impact reporting provided annually until full allocation of the Sustainable Finance Instruments' proceeds Second Party Opinion (SPO) from Sustainalytics. Community of Madrid might hire an external party to audit the allocation of proceeds Under the Green Finance Framework, Community of Madrid can issue Sustainable Finance Instruments which include Green, Social, Sustainability bonds, private placements and loans Source: Comunidad de Madrid 53 53#54Second Party Opinion by Sustainalytics1 Use of Proceeds By financing social housing, CdM directly supports Spain's State Housing Plan Comunidad de Madrid's finances public education for all, and allocates resources to guarantee access to education for students in disadvantaged situations The financing of the healthcare programme will facilitate the ongoing provision of quality healthcare services to the local population Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies The support provided to Madrid's SMEs, will strengthen the competitiveness of SMEs and leading to the creation and preservation of jobs, and promote the integration of vulnerable people Financing low carbon transportation and reduction of global CO2 emissions are considered an impactful use of proceeds Project Evaluation and Selection In line with market practice Management of Proceeds In line with market practice Reporting In line with market practice ☑ SUSTAINALYTICS Second-Party Opinion Comunidad de Madrid Sustainable Finance Framework Evaluation Summary Sustainalytics of the opinion that the Comunidad de Madrid Sustainable Finance Framework aligns with the Green Bond Principles 2018 Green Loan Principles 2018 Social Bond Principles 2018 and the Sustainability Bond Guidelines 2018. This assessment is based on the folowing USE OF PROCEEDS The sixeligible categories for the use of proceeds (Affordable Housing ) Education; (i) Healthcare; (v) Social Inclusion; Economic Inclusion and SME Financing: () Climate Change and Environmental Management are aligned with those recognized by both the Green Bond Principles and the Social Bond Principles. Sustanalytics considers the digible categories outlined in the Comunidad de Madrid Sustainable Finance Framework to have clear social and environmental benefits with specific relevance to UN Sustainable Development Goals 1, 3.4.5 8. 11,13 and 15 PROJECT EVALUTION / SELECTION Bigible programmes are evaluated and selected by a dedicated internal Selection Monitoring and Evaluation Commitee The Commmee is composed of representatives from the Regional Treasury Department and sub- departments for Financial Planning and Public Finance and it will meet prior to the issuance of a sustainable finance instrument to select eligible programmes from the General Budget. Sustaina considers the project evaluation end selection process of Comunidad de Madrid to be in line with market practice MANAGEMENT OF PROCEEDS In line with market practice, the proceeds of the Sustainable Finance Framework will be allocated to eligible budgetary programmes in the General Budget of Comunidad de Madrid, comesponding to the fiscal year of the lasuance and/or to the fiscal year preceding the year of the issuance. In case full allocation at issuance is not possible, the unallocated proceeds will be held and/or invested in Comunidad de Madrid's liquidity portfolio. pending full allocation REPORTING Comunidad de Madrid intends to report on the allocation of proceeds on its website within approximately one year from the cats of issuance and until the proceeds have bean fully allocated Allocation reporting will include the total amount provided to the various eligible budgetary programmes. Where feasible, the impact report will include relevant impact indicators per each green and accial eligible category. Sustainalytics views Comunidad de Madrid's allocation and impact reporting as aligned with market practice © 2020 SUSTAINALYTICS SECOND- PARTY OPINION Evaluation date Issuer Location March 27, 2020 Madrid Spain Report Sections Introduction 2 Sustainalytics Opinion. Accendices 3 11 For inquires contact the Sustainable Finance Solutions project team Evan Bruner (Arnsterdam) Project Manager even [email protected] (+31) 20 205 0027 Jean-Claude Berthelot (Amsterdam) Client Relations jean claude [email protected] (+31) 20 205 00 15 Sustainalytics is of the opinion that the Comunidad de Madrid Sustainable Finance Framework is credible and impactful, and aligns with the Green and Social Bond Principles and Green Loan Principles 2018 Source Comunidad de Madrid 1The full Second Party Opinion is available at: http://www.comunidad.madrid/inversion/relacion-inversores/deuda-sostenible 54 5.4#552023 Eligible Portfolio – Budgetary Programs EDUCATION €103.54MM 3.9% AFFORDABLE HOUSING ECONOMIC INCLUSION AND SME FINANCING €9.59MM 0.27% CLIMATE CHANGE AND ENVIRONMENT MANAGEMENT €711.49MM 26.77% €42.01MM 1.58% SOCIAL INCLUSION €1261.73MM 47.48% AMOUNT OF THE RESPONSIBLE BUDGET € 2,657.63 million HEALTHCARE €531.74MM 20% 559#56- 2023 Eligible Portfolio – Budgetary Programs Eligible categories Program Description Affordable Housing Provision of affordable housing and shelter to disadvantaged populations Education Healthcare Program in the General Budget 261B Amount in € million (2023) UN SDGs FOVERTY SUSTAINABLE CITIES 11 AND COMMUNITIES 42.01 • Provision of education to the youth (including disadvantaged groups) and support of public schools and universities QUALITY 232A/322A, B, C, F/ 4 EDUCATION 103.54 323M / 324M • Support to Madrid's Public Healthcare System and financing of high impact medicines against rare diseases • Social Inclusion • Economic Inclusion and SME Financing Climate Change and Environmental Management Source: Comunidad de Madrid • • • 312A, 313B 531.74 Fight against gender violence and promotion of equal opportunities Integration, education and employment programmes and financial assistance to vulnerable groups at risk of social exclusion Universal accessibility to the public transportation system (reduced price ticked) Provision of goods and services to the elderly and the mentally and/or physically disabled SMEs financing Employment promotion and advancement, 231A,B,C,D,E,F, I/ 232A, B, E/241A, M/ 261B/322A,B,F/ 323M / 324 M / 422B/ 431A/ 433A/ 453N / 463A/ 1,261.73 463A / 466A 7.12 including people with distance to labour market 3 GOOD HEALTH AND WELL-BEING W POVERTY GENDER EQUALITY 4 QUALITY EDUCATION DECENT WORK AND 8 ECONOMIC GROWTH CLIMATE 13 ACTION • Environmental conservation and biodiversity 422B453N / 456A,N 711.49 56 56#57Reporting Framework example: Sustainability Bond Allocation Reporting 2022 3000 2500 2000 1500 1000 500 0 Eligible Expenditure Total Value of Eligible Projects EUR 2,657.63Mm Vs Sustainable Finance EUR 1.35Bn ■Affordable Housing ■ Education ■ Healthcare Sustainability Funding ■Social Inclusion Economic Inclusion and SME Financing ■Climate change and Environment Management % of Eligible Sustainable Project Portfolio allocated: 50.8% Source: Comunidad de Madrid % Sustainable net proceeds allocated: 100% 57 57#582022 Sustainability Bond Impact KPIs Project category Target population Eligible Project Category SDG Addressed Target Group Budgetted amount (if applicable) Allocation information Impact indicators Allocated to sustainable bond (amount) Share of Total Budget Financing Number of beneficiaries Other impact indicators MEUR % Number Unit of measure Affordable Housing Goal 1: No Poverty Goal 11: Sustainable Cities and Communities Disadvantaged and underserved 42,010,166.28 42,010,166.28 3.1% groups 172 Families with social housing Education Goal 4: Quality education Youth. disadvantaged groups 103,540,691.36 103,540,691.36 7.7% 479,692 Number of vulnerable students Additional Indicators Number of families assited by ASIVECAM Number of families reallocated Number of social housing units acquired Number of students with academic reinforcement Number of scholarships professional training higher degree Number of public schools (0-18 years) number / unit of measure 21,445 76 35 27,045 8,686 1,450 Number of people with a rare disease Goal 3: Good Healthcare Citizens (including Health and Well-disadvantaged and underserved being groups Number of people 531,740,684.35 529,690,684.69 39.2% 431 treatment medication 62,495 high impact Social inclusion Goal 1: No Poverty SDG 5: Gender equality Disadvantaged and underserved groups 1,261,728,454.33 666,567,129.21 49.4% 1,912,385 Economic inclusion Environmental management Total Goal 4: Quality education Goal 8: Decent work and economic growth Goal 13: Climate Action being provided access to services and adequate medication Number of individuals or families benefiting from social benefits Number of individuals or families benefiting of social minimum income Number of victims of gender violence supported Number of subsidized trips Number of SMEs and long-term unemployed SMEs that 7,121,473.41 7,121,473.41 0.5% 112 received support 711,491,790.05 1,069,855.05 0.1% 2,657,633,259.78 1,350,000,000.00 100.0% 2,392,792 Number of annual data for air quality parameters Number of annual data meteorological parameters 6,694 families 19,992 117 1,392,801 1,464,484 58 58#59Selected Projects for the 2023 Sustainability Bond Comunidad de Madrid has a clear social and environmental mandate to meet the needs of its citizens, Sustainable development is at the centre of our policies for strong. sustainable and inclusive growth and development, SELECTED PROJECTS ELEGIBLE CATEGORY PROJECT NAME AMOUNT Affordable Housing Eviction of Cañada Real and Guadarrama River. Acquisition of housing. Maintenance and conservation of inhabited social housing. Development of land for the construction of social housing. Construction of new social housing developments. 737.000,00 3.670.347,45 8.489.476,74 28.283.348,70 Repair of uninhabited social housing for their second allocation. Neighbourhood Assistance Service of the Community of Madrid. A SIVECAM. Attention to students with specific educational support needs. Book lending programme. ACCEDE Programme. Maintenance of Secondary Education Centres. 1.167.938,29 1.662.057,10 2.551.809,50 Education Refuerza Programme (academic support and reinforcement activity). Training and awareness-raising for women in situations of social exclusion. Scholarships for advanced vocational training. Educational compensation classrooms. Shola hips for public universities 53.444.283,48 22.536.731,00 2.343.000,00 0,00 18.958.248.70 706.618.88 3.000.000,00 529.000.000,00 Healthcare Social Inclusion High-impact medicines and orphan drugs. Collaboration with Local sector Collaboration with professional bodies. Collaboration with citizens' organisations. Mobile Support Service for Drug Dependency Grants for School meals Economic benefits in situations of dependency. Domiciliary care in situations of dependency. Care services for seniors in specific centres Subsidies for public transport users. Care for the elderly in centres. Care services in residential centres for women victims of gender violence. Social canteens services Care services in non-residential centres for women victims of gender violence. Economic assistance for the social integration of women victims of gender violence. Free school transport service for pupils in special education centres. Free transport service for students with physical disabilities. Free school meals for pupils in special education centres. Free school transport service for pupils in shantytowns. Participation and integration centres (CEPI). Volunteer school. Housing First Programme. 87.244,80 103.440.00 499.999,83 2.049.999,66 29.229.333.97 288.654.720,00 89.300.931,77 333.643.202,58 487.987.407.00 13.359.295,00 599.189,90 3.021.344.00 4.531.869,56 63.800,00 8.587.229.43 7.364.565,94 2.835.095.16 978.577,08 2.371.418.40 119.452,00 527.727,40 Care centre for people in situations of social exclusion. Network of volunteer information points (PIV). Madrid LGTBI Information and Care Programme. Minimum Insertion Income (RMI). 1.690.680.00 75.812.90 216.357,77 19.344.249,10 Subsidies for integration projects linked to the Minimum Insertion Income (RMI). Grants for LGBT NGOs. 4.500.555,41 550.000,00 Development Cooperation Subsidies 4.177.840,00 Aid for the promotion of technological sectors Consortia. Subsidies for the promotion of technological sectors. Start-ups Economic Inclusion and SME Financing Aid for the use of innovation services in SMEs Innovation vouchers. 2.497.497,97 730.252,04 748.418,00 Aid for industrial SMEs Industry 4.0 projects. 2.471.761,59 Aid to Innovation Intermediary Entities. 675.545,81 Natural Protected Areas. 4.187.972.00 Measures to protect and improve the environment. Environmental education. Conservation and maintenance of peri-urban parks. 1.614.179,00 3.214.000.00 Climate Change and Environment Management Subsidies for non-profit entities with environmental purposes. Subsidy for the user of public transport (Clean Transport). Action Plan on Listed Wetlands. 500.000,00 Recovery and improvement of forest lands. Maintenance and support for the management of the air quality network. 700.000.000.00 151.434,00 754.350.00 1.069.8.55,05 2.657.633.259,78 Source: Comunidad de Madrid TOTAL#60CASE STUDY for HEALTHCARE High Impact Medicines and Orphan Drugs Mobile Support Service for Drug Dependency diferentes iguales Enfermedades distintas, personas iguales Plan de mejora de la atención sanitaria a personas con enfermedades poco frecuentes de la Comunidad de Madri 2016-2020 Comunidad de Madrid offers universal healthcare coverage to all of its citizens. The overall objective of the healthcare programme is the maintenance of a quality healthcare service and an efficient use of resources. Madrid's public healthcare service includes plans such as the "Plan to improve healthcare services for people with rare diseases". Providing integrated and comprehensive care by all the agents involved is essential to improve the daily life of these people and their families. Within the Plan to Improve Healthcare for People with Rare Diseases, Comunidad de Madrid financed EUR 529mm for rare diseases treatments, close to 63,000 patients were treated: 431 patients which annual costs is over EUR100,000 852 patients with Chronic Hepatitis C 31 CAR-T therapy treatments. 8,585 multiple sclerosis 25,930 immune-mediated inflammatory diseases patients 25,892 HIV patients 763 Pulmonary hypertension αμός 8 Comunidad de Madrid provides healthcare to about 3300 drug addicts out of treatment through mobile devices in marginal areas. This project aims to minimize the negative effects related to consumption and contributes to public health by controlling and monitoring transmitted diseases, providing referrals to drug addiction treatment, counselling and support services network Proceeds of the bond will be allocated to projects aimed at providing a modern and sustainable public healthcare service system to the citizens of Madrid (including, but not limited to, vulnerable groups) Source: Comunidad de Madrid#61CASE STUDY for EDUCATION ACCEDE - Book lending program Education Centers Maintenance Programa ACCEDE } REFUERZA-Academic Support Accede Program textbook lending program for eligible students of Primary Education, Compulsory Secondary Education and Basic Vocational Training Close to 480,000 students from nearly 1,500 schools benefited from this program Comunidad de Madrid has allocated EUR53,4Mm to this program Comunidad de Madrid offers a wide network of public primary and secondary education schools and special education schools Every year, Comunidad de Madrid builds new centers to cope with takes care of the maintenance of schools, by taking preventive, diagnostic, updating, replacement, and repair procedures. In 2022 more than 370 schools benefited from these procedures The Academic Support program seeks to complement Primary Schools training by offering students reinforcement activities, study techniques or knowledge expansion sessions. About 15,000 students benefited form this program. 72% of students saw their grades and performance improve Education is a fundamental social right, bringing significant benefits to society. An educated and skilled workforce is essential for our region's competitiveness. Source: Comunidad de Madrid#62CASE STUDY for AFFORDABLE HOUSING Uninhabited Social Houses Refurbishment ° • Cañada Real & La Sabinas - Rehousing ASIVECAM Neighborhood Assistance Comunidad de Madrid dedicated close to EUR 1,200Mm to Social Housing projects. Among others those dedicated to the maintenance and conservation of inhabited social housing to improve the safety and the accessibility and enhance its energy efficiency 314 vacant social homes were refurbish Comunidad de Madrid repaired 54 homes and rehoused 76 families from the dismantling of the Cañada Real and Las Sabinas shanty towns, investing 737.000€ Social housing plays a vital role in meeting the housing needs of people across Comunidad de Madrid This project is part of a global plan aiming eliminate the last shanty towns in the region by providing safe, secured and long term accommodation to disadvantaged population. Comunidad de Madrid is also committed to cleaning and restoring the riverbanks improving the environment ASIVECAM- the Comunidad de Madrid Neighborhood Assistance service Aims to favor and activate processes of coexistence and communication, to provide answers to the problems raised in the promotions of public housing of the Social Housing Agency, which facilitate the integration of people and the development of these, through their participation. Comunidad de Madrid is committed to tackle inequalities and provide access to affordable and quality housing. Social housing plays a vital role in meeting the housing needs of people across Comunidad de Madrid Source: Comunidad de Madrid#63CASE STUDY for SOCIAL INCLUSION Minimum Insertion Income (RMI) M MM H Assistance for Women victims of gender violence Domiciliary Care for Seniors Minimum Insertion Income (RMI) refers to the different programs aimed at individuals and families who lack sufficient economic resources to cover their basic needs, accompanied by a process of social intervention. In 2022, 5.355 persons received the RMI in the Comunidad de Madrid. Comunidad de Madrid earmarked EUR152,5Mm for this purpose Comunidad de Madrid funds a broad range of initiatives and programs aiming to end all forms of gender-based violence In 2022, 436 women and 279 children were treated in Shelter Centers specialized in offering women and their dependents a comprehensive recovery treatment that from the psychological, educational, socio- labour and legal fields, favors the normalization of the family unit. Day Centers supported more than 2,000 women and 89 children Comunidad de Madrid provided home assistance to more than 60,500 dependent persons. The care services aim to promote personal autonomy, as well as meeting the needs of people with difficulties in performing basic activities of daily living. Comunidad de Madrid's strategy for social inclusion aims to achieve the full integration in society of people who are in a situation (or at risk) of poverty and social exclusion, fighting against gender violence and promoting equal opportunities Source: Comunidad de Madrid#64CASE STUDY for SME FINANCING Industry 4.0 projects APRIM Case Study Ayudas Pymes Industria 4.0 aprim alta precisión industrial mecánica Comunidad de Madrid Dirección General de Economía y Competitividad CONSEJERÍA DE ECONOMÍA, EMPLEO Y COMPETITIVIDAD SMEs play a major role in Comunidad de Madrid's economy. Supporting SMEs is a priority for the regional goverment, as well as providing these companies with the necessary tools to adapt to current market needs and expand their businesses Under the Industry 4.0 program, Comunidad de Madrid provided in 2022 assistance and funding to 59 Industrial SMES for the development and implementation of innovative proyects APRIM was established in 1965 with a basic activity focused on the manufacture and mechanization of parts and assemblies destined for the Automotive and Transport Industry. APRIM has evolved to offer a wide diversification of services including the manufacture of kits and assembly of sets with components not only mechanical, but also pneumatic, electrical, electronic, etc On May 19, 2022, the Ministry of Economy, Finance and Employment of Comunidad de Madrid provided the industrial company APRIM with EUR131,981.20 grant to implement innovative solutions for the automation of its production lines and digitization of the company. These projects and investments are link to: Open/Linked/Big data and Data analytics Installation of turning lathe • Installation of double head lathe 3 Robots All Sma 12:46 Digitising industries is one of the key challenges to be tackled for fostering growth. Comunidad de Madrid is committed in supporting SMEs in all stages of their life cycle to develop and achieve growth and engage in innovation Source: Comunidad de Madrid#65. • Leadership in Sustainable Bonds • First Spanish Region to issue Sustainable Bonds. • Largest number of Sustainable Bonds issued in Spain. . Ability to Issue Green, Social and Sustainable Bonds and Loans. · 7 Sustainable benchmark size public bond issued since 2017. 47% of the total Comunidad de Madrid's annual issuance in 2022 were sustainable bonds. • Largest amount outstanding in Sustainable Bonds (7,803 MM). Transparent and public reporting on projects financed under the framework. Amount Settlement Tenor (€ million) Sustainable Bond (Public) 1,000 02/23/2018 10 Sustainable Bond (Public) 1,250 02/14/2019 10 Sustainable Bond (Public) 1,250 02/27/2020 10 Green Bond 700 05/08/2020 7 Sustainable Bond (Public) 1,000 03/26/2021 10 Green Bond 500 11/26/2021 7 Sustainable Bond (Public) 1,000 04/11/2022 10 Green Bond 500 10/14/2022 7 Sustainable Bond (Public) 1,000 02/24/2023 10 Source: Comunidad de Madrid 65 65#66CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid IV.GREEN BOND 2022 & IMPACT REPORT 2021#67Green Expenditures for the 2022 Green Bond issuance Clean Transportation ENT EMT MADRID 135 Irizar © 2569 LCD Comunidad de Madrid supports the decarbonization of the Region's public transport ⚫ In 2020, EMT Madrid has approved a €39m investment for the purchase of 50 new electric buses and 15 electric micro-buses This is in line with the company' strategy of gradually reducing the fleet's carbon emissions Comunidad de Madrid supports the maintenance and development of the fully-electrified Madrid's metro Thanks to the Energy Saving Plan 2012-2017 and the current Energy Efficiency Plan, Metro de Madrid - the public enterprise of the Madrid underground - has reduced electricity consumption in daily operations by 25% Comunidad de Madrid becomes the first Public Sector issuer in Spain to align its Green bond with the EU taxonomy and standards Source: Comunidad de Madrid 67#68Comunidad de Madrid 2022 Green Bond review Final Terms and Conditions Issuer Issuer Ratings Format The Autonomus Community of Madrid A-/Baa1/A-/BBB (S&P/Moody's/DBRS/Fitch) RegS, Bearer Dematerialised Senior, Unsecured Ranking Risk Weighting 0% Size Maturity Settlement Coupon Benchmark Reoffer Price Listing Gov Law Bookrunners ISIN EUR 500m 31-October-2029 14-October-2022 (T+8) 2.822% Fixed, Annual, Act/Act - Long first SPGB 0.6 10/31/29 @ 87.282% HR 107% 100% / 2.822% / SPGB + 23 bps AIAF Spanish BBVA, CaixaBank, Crédit Agricole CIB, ING and Santander ES00001010JO Investor Type and Geographic Distribution 23% 17% 16% 14% 14% 9% 7% Spain France UK & Ireland Germany & Austria Italy BeNeLux Other EU 49% 46% Other SRI 49% 51% Transaction Highlights • On Tuesday, October 4th, 2022, the Autonomous Community of Madrid successfully launched and priced its third Green bond deal and second public transaction in 2022. ⚫ The bond issued under Autonomous Community of Madrid's existing Sustainable Finance Framework, becomes the first public sector issue in Spain - and one of the few in Europe - to be fully aligned with the EU Green Taxonomy. • The transaction was preceded by a week-long marketing exercise with European investors: • On October 3rd, the Autonomous Community of Madrid formally mandated the banks for a new 7yr Green Bond with the objective to launch the transaction in the near future subject to market conditions. • On October 4th, the order book was officially open with a price guidance of SPGB+23 bps. ⚫ Books closed with a total demand of EUR 500M and final spread of SPGB+23bps allowing Comunidad de Madrid to print a successful deal in a very challenging and volatile market and consolidating its leading position as ESG bond issuer, being the first Spanish public sector issuer to launch 3 green bond deals. In terms of metrics the orderbook was well supported by international investors accounting for 77% of the total demand. The quality of the orders also allowed to allocate 53% of the notes to Real Money accounts. 4% 1% Fund Managers Banks Ins & PF HF 68#69Comunidad de Madrid 2021 Green Bond review Final Terms and Conditions Issuer Issuer Ratings Issue Ratings Format Ranking Size The Autonomus Community of Madrid Baa1/A-/BBBU/AL (all Stable) Moody's/S&P/Fitch/DBRS A-/AL (S&P/DBRS) Regs, Bearer Dematerialised (No sales into Canada) Senior, Unsecured EUR 500m Risk Weighting 0% Maturity Settlement Coupon Reoffer Spread Reoffer Price Listing Gov Law Bookrunners ISIN 30th July 2028 26th November 2021 (T+7) 0.16% Fixed, Annual, Act/Act - Short first SPGB 1.4 07/28 (mid) + 11 bps @ 0.05% 94% HR 100% AIAF Spanish BBVA, CaixaBank, CACIB, DB (B&D) and Santander ES00001010G6 Investor Type and Geographic Distribution 28% 18% 18% 14% 10% 7% 3% 2% Spain Germany & Austria Italy BeneLux France Switzerland Scandinavia Rest of Europe 38% 38% 16% 8% Transaction Highlights • On November 16th 2021, the Autonomous Community of Madrid formally mandated banks for a new 7yr Green Bond. • On November 17th, and with substantial lols from investors, IPTS were released at SPGB+14bps area which enabled the book to gain further momentum and continue growing, reaching EUR1bn demand (excluding JLM interest) two hours after the announcement: • Books peaked over EUR1.2bn (including JLM interest), allowing to revise price to SPGB+12bps area (+/- 1bps). • The strength and the granularity of the book with over 85 accounts involved allowed the Autonomous Community of Madrid to land a final spread of SPGB+11 bps. • The spread of SPGB+11 bps was the tightest level over SPGB ever printed by the Community of Madrid in a syndicated deal. • This spread also represents only 1bps new issue premium to its secondary curve in a period of extreme volatility in fixed income markets, which clearly reflects the strong support from its investor base. • Community of Madrid also consolidated its position as the leading issuer of sustainable bonds, being the first Spanish public sector issuer to print two green syndicated bond deals. SRI 64% Banks FM PF-Ins Off. Inst 69#70Highlights of the 2021 Comunidad de Madrid's Second Green Bond The only region in Spain that has issued Green Bonds so far Comunidad de Madrid is committed to keep on promoting the ESG bond market and sustainable investments with a Framework that allows the Region to issue Green, Social and Sustainable Bonds The proceeds of the bond have been allocated to expenditures in Clean Transportation Avoided a total of 144,175 tons in CO2eq atmospheric emissions 2021 Green Bond used of proceeds is fully aligned with the EU Taxonomy EU Strong demand from dedicated ESG investors Source: Comunidad de Madrid 70#71Green Eligible Expenditures for 2022: Use of Proceeds (I) Eligible Category Overview of the Green Eligible Expenditures 2021 Main eligible expenditures Budgetary Programme Budget code UN SDGs EU Environmental Objectives Waste Management: 16: Environment, • Measures to implement the Waste Strategy of Comunidad de Madrid Local administration 11 456N 456B SUSTAINABLE CITIES AND COMMUNITIES EU Objective 4: Circular economy and territorial planning Climate change and environmental management Clean transportation: . Promote the manufacture and use of the electric vehicles and points of recharge Promote public transport services and modal shift towards public transportation (e.g. railway, metro de Madrid, bus system) and soft mobility, support multimodal transport solutions and promote the use of bicycles 11 SUSTAINABLE CITIES AND COMMUNITIES 14: Transport, Social Housing & Infrastructure 453N 456B CLIMATE ACTION Environmental conservation: Management and restoration of Protected Natural Parks and other unique spaces with important conservation value 16: Environment, Local administration and territorial planning Source: Comunidad de Madrid 15 LIFE ON LAND 456A EU Objective 1: Climate Change Mitigation EU Objective 6: protection and restoration of biodiversity and ecosystems 71#72Green Eligible Expenditures for 2021: Use of Proceeds (II) Green categories Waste Management Overview of the Green Eligible Expenditures Portfolio 2021 Clean Transportation 11 SUSTAINABLE CITIES Environmental Conservation Source: Comunidad de Madrid Amount (EUR UN SDGs m) Subcategories Amount (EUR m) 11 SUSTAINABLE CITES AND COMMUNITIES Domestic Waste Management 4.9 6 Maintenance of the Air Quality Network 1.1 EMT Bus 116.5 AND COMMUNITIES Intercity Bus 81 Metro 387.8 720.5 13 CLIMATE ACTION Measures for the Promotion of Sustainable Mobility 1.4 Light Train 133.8 Environmental Education 1.0 Conservation of Protected Natural 2.3 Areas Connectivity through Green Infrastructure 2.6 15 N ON LAND 7.2 Protection of Wetlands 0.3 733.6 Recovery and improvement of private forest areas 0.4 00 Grants to NPOs with Environmental Purposes 0.5 733.6 72#73Green Eligible Expenditures for 2021: Use of Proceeds (III) Overview of the Green Use of Proceeds Main Eligible expenditures Waste Management Clean Transportation Impact Indicators UN SDGs Allocated Amount (EUR m) Allocated Subcategories Amount (EUR Managed Waste (tn) Data Samples Collected m) Emissions Avoided (tCO2) Vehicles Subsidized Number of Programs Intervened Surface (ha) Domestic Waste 11 AND COMMUNITIES SUSTAINABLE CITIES 4.9 302,726 Management A 6 Maintenance of the Air 1.1 Quality Network EMT Bus 116.5 SUSTAINABLE CITES AND COMMUNITE Intercity Bus 81 Metro 387.8 1,464,357 6,280 33,426 137,895 720.5 13 ACTION PLINATE Measures for the Promotion of Sustainable Mobility 1.4 3,530 Light Train 133.8 6,476 Environmental 1.0 15 Education Conservation of Protected Natural 2.3 118,527 Areas Connectivity through 2.6 581 Green Infrastructure Environmental Conservation 15 FE ON LAND 7.2 Protection of Wetlands 0.3 15 Recovery and improvement of 0.4 6,557 private forest areas Grants to NPOS with Environmental Purposes 0.5 733.6 Source: Comunidad de Madrid 733.6 Projects Selected 11 73#742021 Green Bond: Allocation and Impact reporting Overview of the allocation of bond proceeds Impact Indicators EU Taxonomy (6.3 Urban and suburban transport, road passenger transport) EU Technical Screening Criteria DNSH Minimum Criteria Safeguards Green category UN SDGs Subcategories Allocated Emissions Amount Avoided (EUR m) (tCO2) Primary EU Environmental Objective EMT Bus 112.2 6,280 11 SUSTAINABLE CITIES AND COMMUNITIES Clean Transportation 13 ACTION Metro 387.8 137,895 CLIMATE EU Objective 1: Climate Mitigation Source: Comunidad de Madrid 500 144,175 74#75Comunidad de Madrid Green Bond 2021: Impacts in the Region's Public Transport A D:D • Metro: the equivalent distance travelled by car would have caused 406,833 tCO2 emissions • EMT bus: the equivalent distance travelled by car would have caused 9,347 tCO2 emissions. • Intercity bus: the equivalent distance travelled by car would have caused 63,648 tCO2 emissions. • Light trains: the equivalent distance travelled by car would have caused 9,173 tCO2 emissions Emissions avoided by Clean Transportation initiatives funded by the 2021 Green Bond proceeds are equivalent to in excess of those of 72,329 passenger vehicles per year* 2021 Emissions Avoided by Green Public Transportation means in the Region (tCO2): 370,024 *Impact calculated based on a reference travel distance of 15,000 km per year by a typical diesel car 75#76EU Taxonomy alignment process 2021 Green Bond Comunidad de Madrid • The EU taxonomy is a classification system identifying green economic activities that contribute substantially to one of the European Union's six environmental objectives including climate change. • • In 2022, Comunidad de Madrid has carried out an exercise to asses which proportion of its use of proceeds reported in its second Green Bond (issued in 2021) is aligned with the EU taxonomy. In this regard, Comunidad de Madrid has asked DNV to asses Comunidad de Madrid's 2021 Green Bond Use of Proceeds (Clean Transportation) compliance with the EU Taxonomy and has received a positive assessment. The assessment is limited to the expenditures allocated to the second Green Bond issued in 2021 by the Region and reported in this document. An activity is considered compliant with the EU Taxonomy if: 1. it contributes substantially to one or more of the environmental objectives or enables other activities to make a substantial contribution to one or more of them, 2. it does no significant harm to other environmental objectives, and Taxonomy eligibility Technical screening phase 3. it complies with social and governance Minimum social safeguards compliance safeguards. No Yes Do screening criteria exist for the economic activity? Yes Does the activity substantially contribute to climate change mitigation? Yes No Does the activity meet the Do No Significant Harm requirements? Yes No Does the activity comply with the Minimum Social Safeguards? 76 6#77Green Bond 2021: DNV opinion on Taxonomy alignment assessment DNV WHEN TRUST MATTERS Finding and DNV's Opinion Alignment to EU Taxonomy GREEN BOND ALLOCATION AND IMPACT REPORTING EU Taxonomy Alignment Comunidad Autónoma de Madrid Report No.: 1, Rev. 1 Document No.: PRJN-446392 Date: 23/09/2022 Table 1: Compliance with the technical screening criteria EU Taxonomy Technical Screening Criteria The activity provides urban or suburban passenger transport, and its direct (tailpipe) CO2 emissions are zero Until 31 December 2025, the activity provides interurban passenger road transport using vehicles designated as categories M2 and M3 that have a type of bodywork classified as 'CA' (single-deck vehicle), CB' (double-deck vehicle), CC (single-deck articulated vehicle) or 'CD' (double-deck articulated vehicle), and comply with the latest EURO VI standard, .e. both with the requirements of Regulation (EC) No 595/2009 and, from the time of the entry into force of amendments to that Regulation, in those amending acts, even before they become applicable, and with the latest step of the Euro VI standard set out in Table 1 of Appendix 9 to Annex 1 to Regulation (EU) No 582/2011 where the provisions governing that step have entered into force but have not yet become applicable for this type of vehicle. Where such standard is not available, the direct CO₂ emissions of the vehicles are zero. N.A. Project EU Taxonomy Alignment-Comunidad de Madrid Use of proceeds for Metro (EUR 387.8 million) and electric buses (EUR 105.375 million) are zero emissions and hence considered aligned with substantial contribution criteria set by the EU Taxonomy. Use of proceeds for Hybrid busses (EUR 11.125 million) fit Regulation 2020/852 and are aligned with the technical screening criteria. Comunidad de Madrid has provided type approvals and technical specification of the busses showing compliance with EURO VI standard. in as a transitionall activity as referred to in Article 10 of Emissions avoided with this LoP have been calculated by Comunidad de Madrid as 137,895 tCO2 for Metro, and 6,280 tCO2 for busses (EMT). Table 3: Compliance with the minimum social safeguards Minimum social safeguards As per article 18 of Regulation (EU) 2020/852: The minimum safeguards referred to in point (c) of Article 3 shall be procedures implemented by an undertaking that is carrying out an economic activity to ensure the alignment with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights: Project EU Taxonomy Alignment - Comunidad de Madrid CSR Policy and Code of Conduct is in place for both Metro and EMT, aligned with the principles and rights set in the UN Guiding Principles on Business and Human Rights and the principles and rights set out in the fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights. As part of public administration, procurement is regulated by the Public Sector Contracts Act and subject to principles and including requirements of responsible procurement, compliance with ethical standards and respect for the human rights, integrity, transparency and protection of the environment. DNV has reviewed the information provided and concludes. that Comunidad de Madrid complies with the minimum social safeguards in Article 18 of Regulation (EU) 2020/852. "On the basis of the information provided by Comunidad de Madrid and the work undertaken, it is DNV's opinion that proceeds have been used on Clean Transport projects that are aligned with the criteria established in the EU Taxonomy for Sustainable Activities- ANNEX 1 to Regulation (EU) 2021/2139 Section 6.3 (i). for DNV GL Business Assurance España S.L.U." Table 2: Compliance with the "Do no significant harm" ("DNSH") criteria. DNSH Criteria (2) Climate change adaptation The activity complies with the criteria set out in Appendix A to Annex 1 (EU) 2021/2139. (3) Sustainable use and protection f water and marine resources NA (4) Transition to a circular economy Measures are in place to manage waste, in accordance with the waste hierarchy, both in the use phase (maintenance) and the end-of-life of the fleet, including through reuse and recycling of batteries and electronics (in particular critical raw materials therein). (5) Pollution prevention and control For road vehicles off categories M, tyres comply with external rolling noise requirements in the highest populated class and with Rolling Resistance Coefficient (influencing the vehicle energy efficiency) in the two highest populated classes as set out in Regulation (EU) 2020/740 of the European Parliament and of the Council and as can be verified from the European Product Registry for Energy Labelling (EPREL). Where applicable, vehicles comply with the requirements of the most recent applicable stage of the Euro VI heavy duty emission type- approval set out in accordance with Regulation (EC) No 595/2009. (6) Protection and restoration of biodiversity and ecosystems NA Project EU Taxonomy Alignment - Comunidad de Madrid Following climate change vulnerability and risk analysis, Comunidad de Madrid issued Plan Azul 2013-2020, a strategical program of measures for mitigation and adaptation to climate change, to be implemented in Comunidad de Madrid. Furthermore, a new strategy is under development. that will set out the broad lines of action up to 2030 to make. progress in terms of climate action (mitigation and adaptation) and improvement of air quality, in line with recent international and national guidelines and requirements. The UOP in Metro and Busses is deemed not to interfere with the adaptation measures contained in Plan Azul, measures for water resources, other vulnerable systems and industries, indicators for climate change adaptation, reforestation, increase of carbon sequestration in agricultural soils in the region. DNV considers this is in line with the criteria established for Climate Change Adaptation in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Not applicable as per Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. However, Metro has provided evidence of extensive water use and management plans for each underground station showing plans and measures to mitigate effects on water resources. Metro de Madrid and EMT operate under an Environmental Management Systems certified according to ISO 14001. Responding to a new organisational model in Mietro, actions and initiatives are implemented based on integral sustainability, using and optimising stocks and flows of resources (water and energy), materials and waste. Among others recovery of more than 95% of the waste generated. including batteries and electronic products, through improved waste segregation and management. A strategic plan in place in EMT for circular economy includes projects like the design and construction of a Hydrogen Fuelling Station and purchasing of biogas for the supply of CNG. DNV considers this is in line with the criteria established for circular economy in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Comunidad de Madrid has provided type approvals and technical specification of the busses showing compliance with EURO VI standard and external noise requirements. DNV considers this is in line with the criteria established for pollution and prevention control in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Not applicable as per Commission Delegated Regulation (EU) 202 1/2139, Annex 1,6.3 Urban and suburban transport, road passenger transport 77#78Clean Transportation Impact Calculation Methodology 1.- METHODOLOGICAL BASES The methodology developed and the emission factors applied are based on the following references: 1. 2. 3. EMEP/EEA Air pollutant emission inventory guidebook - 2019. IPCC Guidelines for National Greenhouse Gas Inventories, 2006 Intergovernmental Panel on Climate Change Guidelines for National Greenhouse Gas Inventories (hereafter 2006 IPPC). National Inventory of Emissions to the Atmosphere of Spain of the Ministry of Agriculture and Fisheries, Food and Environment. The methodology used is based on that proposed in the European Environment Agency's technical report COPERT IV (Computer Program to Calculate Emissions from Road Transport), which is used as a reference in the EMEP/EEA and IPCC guidelines. This methodology is based on the application of emission factors by type of vehicle and according to different speeds, as well as other estimation algorithms. In the case of direct emissions from urban and interurban bus fleets, diesel hybrid buses and natural gas hybrid buses have been included. According to the COPERT methodology, CO2 emissions are included within the Group 2 pollutants in terms of the calculation approach, where emissions are estimated from fuel consumption using the emission factors by pollutant and vehicle type, published in the National Emissions Inventory. The calculation algorithm is as follows: E_(CO2,k)=(FE)_(CO2,k) x[Cons]_k where: ECO2,k CO2 emissions per vehicle type k. Consk Fuel consumption by vehicle type k. FECO2,k = CO2 emission factor, for vehicle class k. Therefore, the activity data used is the fuel consumption or otherwise the km traveled, estimating in this case the fuel consumption based on the consumption factors [g fuel/km] for each type of vehicle k for the speed considered. The emission factors used are those published by the Spanish Climate Change Office (OECC), with those for 2019 being those available to date. The estimation of indirect emissions associated with electricity consumption is carried out taking into account the emission factor of the retailer that supplies electricity to each home. These emission factors are those published by the Comisión Nacional de los Mercados y las Competencias, being the 2019 factors those available to date. The calculation algorithm is as follows: EEE = CEE X FECO2_EE Where: EEE CO2 emissions from electricity consumption (t CO2). CEE= Electrical Energy Consumption (kWh). FECO2_EE = CO2 emission factor associated with electricity consumption (t CO2/kWh). In order to quantify the emissions avoided by regular public passenger transport, it is taken into account that the demand for travel would be satisfied by the use of private vehicles. The calculations of avoided emissions are made considering that the passenger-km traveled by CRTM buses in a given year are in turn traveled by passenger vehicles and with an average occupancy rate. Passenger-km traveled is the result of adding the product of the length of an average trip (km) and the number of passengers. The calculation equations are analogous to those used to estimate bus fleet emissions, but in this case using DEFRA 2020 factors. 2.- YEAR OF CALCULATION: 2021 3.- SCOPE: Road modes: EMT of Madrid (hybrid and pure electric vehicles) Road concessions in the rest of the Community of Madrid (hybrid and pure electric vehicles) Railway modes: Metro de Madrid (Subway) Railway concessions 4.- ACTIVITY DATA Road modes: Vehicle characteristics (Euro standard, fuel type) Railway modes: Fuel/electrical energy consumption of vehicle fleets o Kms traveled per year Electrical energy consumption for traction and auxiliary installations 5.- EMISSION FACTORS CO2 emission factors and density and PCI parameters for fossil fuels and electricity published by the Spanish Climate Change Office (OECC), available 2020 to date COPERT consumption factors per KM (EMEP/EEA 2019 Guidelines). DEFRA 2020 factors (private vehicle emissions) 6.- AUTHORS OF THE CALCULATION CRTM with the collaboration of NOVOTEC Consultants in the Calculation of Emissions from road concession buses in the rest of the Community of Madrid, based on its own data (supply and demand) and activity data (fuel/electrical energy consumption) provided by the corresponding operators. 78#79Thanks you for your attention Contact Information Rodrigo Robledo Tobar Director General for Financial Policy and Treasury Mª Luz García Aliaga Deputy Director Financial Policy • • Beatriz Mula Coso Head of Funding [email protected] http://www.comunidad.madrid/inversion/relacion-inversores Disclaimer This presentation was created by the Comunidad de Madrid This presentation does not constitute an offer or invitation (by or on behalf of) the Comunidad de Madrid to the subscription or purchase of securities issued by the Comunidad de Madrid. This presentation is not intended to provide any assessment of the financial situation of the Comunidad de Madrid or any assessment of the instruments used by the Comunidad de Madrid and should not be considered as a recommendation from the Comunidad de Madrid. Each recipient of this presentation, independently, should judge the relevance of the information contained in this document, make their own assessment and determine whether additional information should be sought and consult their own advisors in terms of legal, fiscal, or another type that is deemed necessary. 79#80ANNEXES CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid#81Overview of outstanding Sustainable transactions Settlement Maturity Amount Settlement Maturity Amount Settlement Maturity Amount BILATERAL LOANS SUPRANATIONAL LOANS SUSTAINABLE PLACEMENT Social Loan 2016 2026 Sustainable Loan 2017 2032 Sustainable Loan 2018 2032 20.000.000 240.000.000 340.000.000 Sustainable Loan Sustainable Loan 2018 2027 2020 2029 Health Social Loan 2020 2033 70.000.000 130.000.000 140.000.000 Private Placement (Social) Private Placement (Sustainable) 2016 2031 48.000.000 2018 2058 238.000.000 Private Placement (Sustainable) 2020 2050 265.000.000 Sustainable Loan 2018 2028 39.000.000 Health Social Loan 2020 2035 465.000.000 Private Placement (Health Social) 2020 2023 52.000.000 Sustainable Loan 2019 2030 50.000.000 Health Social Loan 2020 2035 135.000.000 Public Benchmark (Sustainable) 2018 2028 1.000.000.000 Sustainable Loan 2019 2029 97.000.000 Health Social Loan 2020 2033 51.000.000 Public Benchmark (Sustainable) 2019 2029 1.250.000.000 Sustainable Loan 2019 2030 220.000.000 Health Social Loan 2021 2034 9.000.000 Sustainable Loan 2020 2023 100.000.000 Sustainable Loan 2022 2035 10.000.000 Public Benchmark (Sustainable) Public Benchmark (Sustainable) 2020 2030 1.250.000.000 2021 2031 1.000.000.000 Sustainable Loan 2022 2033 100.000.000 Health Social Loan 2022 2041 200.000.000 Green Loan 2022 2034 300.000.000 Health Social Loan 2022 2037 200.000.000 Sustainable Loan 2022 2037 100.000.000 Sustainable Loan 2022 2035 Social Loan 2022 2032 100.000.000 Sustainable Loan 2023 2036 Sustainable Loan 2022 2027 50.000.000 TOTAL 25.000.000 165.000.000 1.600.000.000 Public Benchmark (Sustainable) Public Benchmark (Sustainable) GREEN BOND 2022 2032 1.000.000.000 2023 2033 1.000.000.000 Green Loan 2022 2031 100.000.000 Sustainable Loan 2023 2033 500.000.000 Sustainable Loan 2023 2035 300.000.000 Public Benchmark (Green) Public Benchmark (Green) Public Benchmark (Green) TOTAL 2020 2027 700.000.000 2021 2028 500.000.000 2022 2029 500.000.000 8.803.000.000 Sustainable Loan 2023 2035 100.000.000 Sustainable Loan 2023 2034 140.000.000 Sustainable Loan 2023 2034 Sustainable Loan 2023 2035 Sustainable Loan 2023 2034 TOTAL 100.000.000 30.000.000 300.000.000 3.326.000.000 TOTAL SUSTAINABLE 13.729.000.000 Source: Comunidad de Madrid 81#82Debt issuance Procedure: Public issue (I) Authorizations *Authorization from the Regional Government. + Authorization from the Central Government. Contact with Investors and Financial Institutions * Continuous contact is maintained with investors and financial institutions, indicating deadlines, levels and amounts in which Comunidad de Madrid has more interest. •Instructions to a group of institutions that are selected taking into account those which have realized higher amounts of private placements with Comunidad de Madrid, as well as those which have participated successfully in public issue of equivalent terms of the Treasury; FADE, ICO, FROB and even private companies. If market conditions are good the transaction will carry out. *Range price formation. The syndicate, in communication with Comunidad de Madrid, sets a price range to trade the issue within the agreed timeframe with Comunidad de Madrid; the eventual commission to be received by the syndicate is discussed, and on the issue date, Comunidad de Madrid informs via email of the roles to be played by each one of the participants of the group and seeks the approval of the syndicate. *Onthe scheduled issue date, the transaction is announced on the trading screens of Bloomberg and Reuters in order to capture the attention of investors. •The order book is opened. The order book is closed. Fixing of Issue Price *Once the bonds have been allotted to the investors who have recorded orders in the book, a time is announced to fix the issue price; at the scheduled time, a joint call for fixing the price is made. Once Comunidad de Madrid and all banks are connected online with the screens of Bloomberg, the transaction is priced in accordance with the agreed terms in the Termsheet, based on the Treasury references. Fixing the issue price, coupon and IRR for the transaction. A first simulation of the relevant calculations is made. Documentary Process *Sending the final Termsheet, with the terms and conditions of the transaction that has just been established, to his approval. At this stage, a distribution by type of investor and nationality is requested. At this point, the institution that has been assigned this role, advises Bloomberg of the price, date, coupon, and ISIN code for the transaction. •Preparation internal report to be signed by the Managing Director of Financial Policy, Treasury and Real Estate and then sent out to our Legal Services. •Legal Service, in accordance with the terms of the report, applies for the corresponding ISIN code to the Bank of Spain and prepares the transaction authorization order to be signed by Regional Minister of Economy and Finance once it has been examined by the Intervención Delegada de Tesorería. *The Orden is published in the BOCM at least two days before payment takes place, since during this period of time the Bank of Spain must be advised of the list of subscribers and the application for the credit of securities; this Order becomes the Prospectus for the public issue. Letters are also sent to the rating agencies in order to request an specific rating for the transaction in question, that is submited to the subscribing institution. • At the same time, over this period, Legal Services, along with the Financial Institution, prepare the Contract which is signed the day before disbursement day and requires a preparatory report by Legal Sercices and by the Intervención Delegada de Tesoreria. That Contract: ⚫Is a suscription contract. *Is excluded from the scope of Law 30/2007, of 30 october, on Public Sector Contracts. Disbursement :T+7 *Disbursement :T+7 *At this stage, the rating letters from the rating agencies are submitted to the subscribing institution. Source: Comunidad de Madrid 82 22#83Debt Issuance Procedure. Private placement or retap (II) Authorizations • Authorization from the Regional Government. • Authorization from the Central Government. Contact with Investors and Financial Institutions • Continuous contact is maintained with investors and financial institutions, and the comunications indicate that Comunidad de Madrid has the necessary authorizations to execute financial transactions, as well as the deadlines, levels and minimum, amounts that interest us. • A specific offer is submitted by an investor o financial institution which should have been assigned a code by the Bank of Spain (Banco de España); for this reason, sometimes the operation is carried out through a bank that has been assigned such code and functions as an intermediary. •The offer submitted is then studied by means of an indicative termsheet, in which key elements that must be included are: • Amount • Princing date •Date of disbursement *IRR all-in (including all commissions) indicating the Treasury reference levels. Fixing of Issue Price • Once the operation has been internally approved, taking into account the financial strategy of Comunidad de Madrid, the pricing time is fixing with the financial institution. • On the day and agreed time for princing, the financial institution contacts by telephone with Comunidad de Madrid in order to establish the price. ■Connected online with the screens of Bloomberg, and in accordance with the terms established in the indicative Termsheet, a first simulation of the relevant calculations is made, and if the parties agree, the transaction is established in a real way. Documentary Process • The final Termsheet, with the terms and conditions of the transaction that has just been established, is submitted to the issuer for his approval. At this stage, a distribution by type of investor and nationality is requested. At this point, the financial institution advises Bloomberg of the amount, coupon, maturity date and ISIN code for the transaction. • Preparation Internal Report to be signed by the Managing Director of Financial Policy, Treasury and Real Estate. • Legal Services, in accordance with the terms of the Report, applies for the corresponding ISIN code to the Bank of Spain (provided that the transaction is not a reopening) and preparesthe authorization order to be signed by the Regional Minister of Economy and Finance, once it has been examined by the Intervención Delegada de Tesorería. •The Order is published in the BOCM at least two days befores payment takes place. Bank of Spain is advised of the list of subscribers and the application for the credit of securities.This Order becomes the Prospectus for the private placement. Letters are also sent to the rating agencies in ordento request an specific rating for the transaction in question, that is submited to the subscribing institution. • Atthe same time, over this period, Legal Service, along with the Financial Institution, prepare the Contract which is signed the day before disbursement day and requiresa preparatory report by Legal service and by the Intervención Delegada de Tesorería. Said Contract: Is a subscription contract. *Is excluded from the scope of Law 30/2007, of 30 october, on Public Sector Contracts. Disbursement (T+6) • Disbursement: T+6 • At this stage, the rating letters from the rating agencies are submitted to the subscribing institution. Source: Comunidad de Madrid 83 83#84Affordable Housing Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at fighting against housing exclusion by providing affordable housing and shelter to disadvantaged populations. • Eligible expenditures include: Development and provision of social housing in Comunidad de Madrid; Renovation, maintenance and improvements of affordable housing projects; Provide affordable housing with adjusted rents to disadvantaged targeted populations; Maintenance, adaptation and modernization of shelters for at risk youth, improving spaces for accommodation. 16 14 By financing affordable housing, Comunidad de Madrid directly supports Spain's State Housing Plan Source: Comunidad de Madrid 84#85Education Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at providing educational programs and vocational training to youth, as well as allowing for a successful integration of disadvantaged groups in the education system, preparing them for future labor market opportunities. Eligible expenditures include: • • • • . Construction, rehabilitation and maintenance of public education schools; Construction, rehabilitation and maintenance of public education centers; Acquisition of equipment to ensure a quality education in public education schools; Financing expenses related to home educational support service (SAED), hospital classrooms (AAHH) and therapeutic educational centers (CET); Financing educational programs and vocational training for young people at risk of exclusion or unemployed; Collaboration to support the integration of students with special educational needs; Expenses related to subsidized school transport services; Financing the development and maintenance of public universities; Providing financial support to university students, based on socioeconomic criteria such as income level and patrimony, or disabilities. Source: Comunidad de Madrid Comunidad de Madrid finances public education for all, and devolves particular attention to allocate resources to guarantee access to education for disadvantaged students 85 85#86Healthcare • • Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at providing a modern and sustainable public healthcare service system to the citizens of Madrid (including, but not limited to, vulnerable groups). Eligible expenditures include: Development, maintenance and modernization facilities integrated in the public healthcare service system (hospitals, health-care centers, mental health facilities, etc.); Provision of health care or social services in underdeveloped areas or vulnerable populations; Acquisition of medical equipment or provision of diagnostic services; Financing programs for the promotion of health; Financing activities to prevent and treat drug addiction. Expenditures related financing to healthcare aimed at fighting COVID-19 in the Madrid's Region can be used for the purpose of the issuance of thematic social bonds. The financing of the healthcare programme will facilitate the ongoing provision of quality healthcare services to the local population, including, but not solely, to the disadvantaged groups Source: Comunidad de Madrid 86 98#87Social Inclusion Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at supporting, integrating and providing basic services to several vulnerable population groups (victims of domestic violence, the elderly, risk population and minorities, physically and/or disabled people, etc.) and to integrate, education and employment programs as well as financial assistance to vulnerable groups at risk of social exclusion. Eligible expenditures include: Fighting against domestic violence and promotion of equal opportunities; Support integration of families and individuals at risk (social action and education); • Provision of financial assistance (i.e minimum income) to people at risk of social exclusion; • Ensure universal accessibility to the MADRILENA CONTRA LA VIOLENCIA DE GENERO 016/2021 Robin food 1 Pro public transportation system; • Support to the elderly; • Support to the mentally and/or physically disabled. Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies Source: Comunidad de Madrid 87#88Economic Inclusion & SME Financing Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects and programs aimed at promoting labor market entry opportunities for long-term unemployed or people with lower employment prospects, and financing SMEs in the Comunidad de Madrid. This activity will contribute to the growth and development of Madrid's economy, hence promoting employment creation and retention. Eligible expenditures include: • • • • Supporting professional training directed at the unemployed in the Comunidad of Madrid; Conducting studies and labor market research to plan and implement policies of employment; Support in orientation programs for those distant to the labor market that allow for a direct contact with employment agencies and employers; Promote integration in the labor market of persons with disabilities and those who are in risk of social exclusion; Provide finance to SMEs, including start-ups in order to stimulate their competitiveness and job creation; Provide training and advice to commercial SMEs to help them improve their skills and business; Support SMEs in the Handicraft and Artisan Market to improve their competitiveness. PRESEVUSTENERALES DELA COMUNIDAD DE MAD PROGRAMAL 1211 MEMORIA DE PROGRAMA INDESTRIA DG DE INDUSTRIA, ENERGIA Y MINAS consumo La Dirección General de Industria, Energia y Minas tiene de la eficiencia energética, para reducir e ciu dedenos madrileños, consiguiende asi incrementa reducir muestre dependencia energética y coedyurar a le Uno de los instrumentos más destacados de esta poli que, además del ahorro de energía y le reducción de seguridad de las instalaciones y mentalizar los Gu importancia de la eficiende energétics. Desde el año 20 cabo aproximadamente 115.000 actuaciones, con lo acumulade cercano a 200.000 toneladas equivalentes e de emisiones cemara a un millón de taneladas de Coz Para 2019 se continuerà con los Planes Renove más re endrán algunos nuevos que están en fexe de estudio Fundación de la Energia de la Comunidad de Madrid, Otro de los objetivos básicas de la Discode Genera Comunidad de Madrid En este sentido, con el fin de co se considera necesario llevar a cabo actuadores en industriales, para incrementar la competitividad de las más atractivas a nuevos inversores, que buscan donde u En concreto, se considera que lo más adecuado, en ord utilización de los fondos disponibles, es actuar so industriales, lo que redundarà en una mejora de las cor actividad, y, por tanto, en una mejora de su competitivid En esta linea, se incentivará también la mejora de at medarte la sustitución de lámparas y luminar energéticamente y la instalación de reguladores de fiu incentivar el autoconsumo energético en las empres campos solares termicos y fotovoltaicas, y de plantas de Por otra parte, se apoyará la utilización de vehiculos combustibles fosiles convencionales. El impulso de esto movilidad más sosten ble En concreto, se apoyará la e recarga cuyo desplegue permisrácubrir las necesidade consumo de energia, reduciendo a la vez su nodencia c En 2019 se continuari, par tarto, con el fomento de para lograr un despliegue que permita la diversificacor PROGRAMA சேய்ஸ் MEMORIA DE PROGRAMA 43 ECONOMIA 11 DG.DE ECONOMÍA, ESTADISTICA 1 COMPETITIVIDAD Siguendo la directical marcada por el Cobierno de la Coma de Madrić, as consideran ajai prioritarios de la definitión de la Palities Feandmis fogonal lo pomacion y donelle sennamine y financiero vu precisa una rápida adotación a tranferencia mundar as nuevan circunstancies que permitan no soo evitar una perdida mundo emaresarial, para lo que se si incluso liderer el proceso de innevasión tecnológica la primera fase de este proceso de mejor de la competitividad empresarial se realiza a través de la realización de informes estudios e investigaciones que penian conccer tendencias en el comportamiento de la economic regional y de sus diferentes sectores, y, en corecuencia, permitan prever posities incas de actuación para las policas públicas en favor del tejido enpresetal y, en especial de las pequeño y medianas mpresas madrileña que siendo afectadas en su funcionamiento y vidad En al desa de estos intramentas bores de análise nunta con la permanente y activa colaboración de los angenismos y asociaciones representantes del tejido empresarial. Otro de los objetivos primordiales en materia de desarrollo económico es el apoyo a las politicas de mejora de la economa madrileña y de a sectores productivos, a traves del impubo competitividad y el empleo, por medio de la elaboración de planes y programas de actuación de vectores y colective Eneste mares y de acuerdo con lo competencies asgoederate Dirección General se establecen las lineas de actuación a fix de conseguir una actuación gefcas eficiente y próxima a las necesidades de la concia regional Por todo el en este ejercitio, se sigue apestando por el mayor conocimiento y anisis de la realidad económica de la región y por el impulso a la creación y desarrollo de nuevo tejido empresarial, entre les que cabe destacar los siguientes Ebonión de estem ber dieses antes estreligion y press relevantes de la economia, sea de forma directa, mediante trabajo intemo, sea a través de ipoyo externo a par medio de colaboraciones con mere organismos espacializados Divulgación y publicación de las actuaciones de apoyo a la actividad empresarial por parte do Dirección General Promoción del conocimiento de la realidad socioeconómica a través de diferentes foros, seminars y jornades sobre le economia y el empies en laregion, así como a través de diverses publicaciones As prospectiva dei entomo acondnice regional tanto an relación con el resto de ragiona mpañolascono con las principales regiones europeas Desamolo y promoción económica y financera cel tejido empresarial de Madrid con especial atención a las peme Apoyo y gestión del refinament de proyectos de inversión de pynes a través de v The support provided to Madrid's SMEs, will strengthen the competitiveness of SMEs and leading to the creation and preservation of jobs, and promote the integration of vulnerable people Source: Comunidad de Madrid 88 80#89Climate Change and Environmental Management Use of proceeds: Proceeds of the Sustainable Finance Instrument will be allocated to financing the measures to promote the sustainable mobility solutions, financing of activities related to the 'Waste Strategy of the Comunidad de Madrid' and to the management and restoration of Protected Natural Parks and other unique spaces with important conservation value ('Zonas de Especial Conservacion'). Eligible expenditures include: Clean Transportation • Development, extension, improvement, promotion and maintenance of public transport including metro, low-carbon buses (such as hybrid and electric buses), including new stations for electric buses only, rail-related infrastructure; Renewal of the most polluting fleets (replacing vehicles with lower emission vehicles); • Funding the installation of charging points for electric vehicles; Urban planning and development that leads to a reduction in the use of passenger cars. Waste Management • Measures to decrease the volume of waste generated; • Treatment of electrical and electronic equipment waste; • Programmes for new uses of recycled materials such as rubber from tires; • Development of research studies on contaminated soils and financing necessary measures to ensure decontamination of identified sites. Environmental conservation and biodiversity • Conservation and restorative activities such as: repair of damaged areas to reconstruct distorted natural habitats, ongoing maintenance in the form of tree, plant and wildlife care and management and fire protection; Educational activities and facilities to enhance awareness and knowledge of the importance of the National Parks and other environmental spaces in the Comunidad de Madrid, encouraging the environmental care by local residents and visitors; Monitoring and development of the Forestry Plan of the Comunidad de Madrid Comunidad de Madrid is heavily financing low carbon transportation and subsequently contributing to the reduction of greenhouse gas emissions in the Region Source: Comunidad de Madrid 89 99