#1CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid INVESTOR PRESENTATION September 2022#2TABLE OF CONTENTS 1. MACRO OUTLOOK II. FUNDING PROFILE AND STRATEGY III. SUSTAINABLE FINANCE IV. GREEN BOND#3I. MACRO OUTLOOK CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA Comunidad de Madrid#4Community of Madrid key figures ↑ GDP pc 2020* 32,048€ (Madrid) 23,693€ (Spain) Average annual population growth(2011-2021) +0.5% (Madrid) +0.2% (Spain) ↑ Stock of companies 2021 547,040 -0.9% i.a.(Madrid) 3,366,570 -1.1% i.a. (Spain) * Last official data available GDP: 216.5 bn € Population: 6,7 mil P Source: Community of Madrid and INE Direct Foreign Investment (Q32021) 7,878 Mill. € -35% i.a. (Madrid) 12,357 Mill. € -23% i.a. (Spain) Д Unemployment rate (4Q2021) 10.1% (Madrid) 13.3% (Spain) ↑ R&D expenditure (2020) 2.0% over GDP (Madrid) 1.4% over GDP (Spain) ICTS Services (2021) Best ranked region in advanced digital services such as Cloud computing or Big data 4#5Community of Madrid in Spain The national GDP amounted to €1.12 billion, of which the Community of Madrid is the region with the highest contribution, 19.3% (€216.5 billion). In terms of population, the Community of Madrid represents for 14.2% of the total population at the end of 2020, with a figure of 6,736,407 (out of a total of 47,326,687). Contribution by region to national GDP (2020) Population distribution by Autonomous Community (2020) Madrid 19.3% Catalonia 19.0% Andalusía 13.4% Valencia 9.3% Basque Country 5.9% Galicia 5.3% Castile and Leon 4.9% Castile La Mancha 3.5% Canary Islands 3.5% Aragon 3.1% Murcia 2.7% Balearic 2.4% 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 and INE Andalusia Catalonia 18.0% 16.2% Madrid 14.2% Valencia 10.7% Galicia 5.7% Castile and Leon 5.0% Canary Islands 4.7% Basque Country Castile La Mancha 4.6% 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#6wwww Community of Madrid in Europa In 2020, Madrid is the sixth largest regional economy in the EU and the largest in Spain. Despite the impact of Covid-19, Madrid continued strengthening during 2021. Region Country GDP (€ million)* GDP PPS (€ million) UE - 27 13,394,141 13,394,141 Ile-de-France (France) France 710,091 652,399 Lombardia Italia 365,515 367,946 Oberbayern 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 Ireland 186,167 155,277 Noord-Holland Netherlands 171,053 147,674 Netherlands 168,986 145,890 Zuid-Holland Source: Eurostat *Year 2020 6#7www. wwwww wwww www Community of Madrid: Key sectors Banking, insurance, and fintech 92.3% of the Spanish foreign investment in financial services in Q1-Q3 2020 (91.2% in 2019). • 1 in 3 Spanish finance and insurance professionals work in Madrid in 2021. Pharma & Biotech • . 34% of Spanish Pharma sector turnover in 2019. 30% of Spanish Biotech sector turnover in 2019. Aeronautical & Aerospace • . . • • 62% of Spanish Aeronautical sector turnover in 2019. 95% of Spanish Aerospace sector turnover in 2019. 40% New Space companies in 2019 Content & Video Game Industry 24% of the national industry in 2019. 33% of Spanish Content and Video game sector turnover in 2019. IT & Communications • . • 91.6% of Spanish Communications sector turnover in 2019. 61.2% of Spanish IT sector turnover in 2019. 97.8% of the Spanish foreign investment in IT&Communication in Q1-Q3 2020. wwwww www Startup Ecosystem • • • Madrid is in the top 5 of the largest entrepreneurship centers in Europe (by number of startups) in 2019. 7th in Europe in capital attraction (€ 509 M in 2019). Logistics • 75% of the logistics companies operating in Spain have their headquarters in Madrid in 2020. The largest logistic area in Spain (38 million sqm) in 2020. Design and graphic arts • • • Second region by number of companies of this sector (more than 3,200 -20% of the total), only behind Catalonia (21%) in 2019. 7% of the manufacturing GVA in 2019. 11% of the employment within the manufacturing sector in 2019. Higher Education • • Highest number of students in Spain (more than 320,000) in 2020. 6 public and 9 private Universities and some of the best business schools according to FT (IESE, IE). Sustainable mobility • 37% of the electric vehicles registered in Spain in 2020 are in Madrid. • 53% of public transport trips are made in sustainable vehicles in 2020. • Leader in carsharing and motosharing in Spain in 2020. 7#8Economic Growth 2020: conditioned by the effects of the pandemic wwww Historically, the Community of Madrid has recorded growth above the national average. However, in 2020 there has been a change in trend given the peculiarity of the crisis derived from the pandemic affecting sectors more linked to services and construction. The greatest destruction of activity took place in the second quarter of the year, with a gradual recovery in the second half of 2020. Evolution of GDP growth (%) 0.0 -10.0 Interannual change (%) of main sectors Community of Madrid -2.1 -4.4 -8.2. -2.5 -2.2 -2.3 -5.0 -2.9. -3.9 2.9 2.7 -4.8 -3.0 -9.3 -6.5 12.7 -10.2 -14.0 -15.0 -20.0 -25.0 -30.0 -18.6 -29.1 Construction -26.0 Services -35.0 Agriculture Industry 12020 II 2020 III 2020 IV 2020 2020 6 4.84.4 4.94.3 4.03.6 4.4 3.4 4 3.63.4 2 0 -2 -4 -6 -8 -10 10 -12 2015 Source: IECM and INE Source: IECM Breakdown of YoY change (%) of service industries 10.0 0.5 0.0 -1.4 -10.0 -5.7 -5.6-2.7 -2.0-1.7 -8.3 -9.9 -20.0 -18.2 -18.2 -7.0 -2.9 -30.0 -22.2 -40.0 -50.0 -60.0 -55.0 -70.0 -10.2 -9.8 Distribution and hospitality services Business and financial services Other services 2016 2017 2018 2019 2020 I 2020 II 2020 III 2020 IV 2020 2020 Source: IECM ■C. of Madrid ■ Spain 8#9ww www Economic Growth 2021: stronger recovery due to the pace of vaccination Historically, the Community of Madrid has recorded growth above the national average. After a greater destruction of activity in the Community of Madrid during 2020 due to the peculiarity of the crisis derived from the pandemic affecting sectors more linked to services and construction, the economic recovery has been more intense in 2021. Largest activity recovery in 2021: Distribution and hospitality services (+17.6%) and construction (10.1%) Evolution of GDP growth (%) 40.0 Interannual change (%) of main sectors Community of Madrid 33.2 23.0 10.1 6.9 €4.13.2 35.0 30.0 25.0 20.0 17.1 15.0 3.6 5.7 10.0 6.0 4.5 2.9 5.33.9 5.6 5.0 1.1 1.1 0.6 0.0 -5.0 -3.6 -10.0 Agriculture Industry Construction -2.8 Services 8 6 4.84.4 4.94.3 4 3.63.4 4.03.6 4.4 3.4 Source: IECM 6.5 5.1 12021 II 2021 III 2021 IV 2021 Breakdown of YoY Change (%) of services industries 2021 70.0 2 0 -2 60.6 60.0 50.0 40.0 17.6 30.0 -4 20.0 16.7 5.0 3.0 9.1 7.5 9.5 10.0 -6 3.2 2.0 1.3 1.5 0.0 -8 -1.8 -0.2 -10.0 -20.0 -6.9 -10 -10.2-9.8 -12 Distribution and hospitality services Business and financial Other services services 2015 2016 2017 2018 2019 2020 2021 Source: IECM 12021 II 2021 III 2021 IV 2021 2021 9 Source: IECM and INE ■C. of Madrid Spain#10www. www. Recent performance of the economic recovery The outbreak of the pandemic had a significant impact on the Spanish economy, and with greater depth in the Madrid economy: year-on-year contraction in Q22020 of 23.1%. The measures adopted to control the pandemic allowed the fall in subsequent quarters to be more contained. During 2021, the good pace of vaccination led to a recovery in economic activity, especially in the Q2 and Q3, with year-on-year of 24.6% and 4.5%, respectively. The year 2022 has started with a continuation of the process of progressive improvement, with a year-on-year growth of 5.2% in Q1. Madrid now stands at 98.2% of its pre-pandemic level of GDP in real terms (Q4 2019), while Spain remains somewhat further away from recovering to pre-pandemic levels (at 96.6% of Q4 2019 GDP). GDP (%) Annual change rate GDP (%) Quarterly change rate 30.0 20.0 10.0 0.0 -10.0 -20.0 -2.3-4.1 -9.0-8.7 -8.8 -2.7.4.3 יין 24.6 17.8. 25.0 20.2 20.0 16.8 15.0 4.5 3.5 5.5 5.26.4 3.1 10.0 5.0 0.0 -5.0 4.5 0.2 0.3 1.1 0.9 2.6-3.02.2 0.80.3 -1.20.5 -4.45.4 -10.0 -15.0 -20.0 17.7 Q42021 Q12022 -25.0 -21.3 Q12020 Q22020 Q32020 Q42020 Q12021 Q22021 Q32021 Q42021 Q12022 Adjusted data of seasonality and calendar effects * End-closed forecast C. of Madrid Spain Source: CRTR (IECM) and CNTR (INE) 10 C. of Madrid ■Spain -30.0 -21.5 -24.0 Q12020 Q22020 Q32020 Q42020 Q12021 Q22021 Q32021 Adjusted data of seasonality and calendar effects * End-closed forecast Source: CRTR (IECM) and CNTR (INE)#11☐ Sectorial analysis: Asymmetrical impact of the crisis On the supply side, the four major sectors (agriculture, industry, construction and services) closed 2021 with year-on-year growth. Although the circumstances of the last quarter of the year led to a slowdown in the pace of growth (restrictions on mobility due to the expansion of the omicron variant, bottlenecks in production chains, high inflation), the services sector stands out for its greater resilience. During the first quarter of 2022, all sectors, with the exception of agriculture, contribute to economic growth in the year. 40.0% 30.0% Interannual change (%) of main sector 2020-Q12022 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% Q1 Q2 Q3 Q4 Q1 Q2 22 2020 Agriculture Industry Construction Q3 Q4 Q1 2021 2022 Services Source: IECM Interannual change (%) of main sector for Q1 2022 6.0% 2.9% 5.3% -0.9% Agriculture Industry Construction Services 11#12Strong signs of recovery in the services sector Services sector structure (Q12022) Detail of the services components YoY change (%, Q42021/2020 and 1Q2022) Business and financial services 46.7% Source: IECM Other services 25.9% 15.0% 9.0% 10.0% 7.5% 5.0% 4.4% 3.2% 2.0% 1.5% 0.0% -1.2% -5.0% -2.7% -10.0% -15.0% -15.3% Distribution -20.0% and hospitality services 27.5% Distribution and hospitality services Business and financial services Other services ■Q42020 ■ Q42021 Q12022 Source: IECM Important reactivation of the whole services sector in 2H20, that continues through 2021 and 2022 Q2 2020-23.4% Q4 2020 -5.8% Q4 2021 +3.2% Q1 2022 +5.3% 12#1330.0 20.0 Rebound in 2021 of all regional demand components The economic growth in the Community of Madrid has been supported by all main components of regional demand. The rebound in investment is noteworthy, with growth in the first quarter of 2022 outpacing the rest of the components (+6.5%), mainly due to the item Other investment excluding investment in housing. YoY Regional Demand Growth by components 30.0 YoY growth of investment components (%) 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 1T 2T 3T 4T 1T 2T 3T 4T 1T 2020 2021 2022 Investment Housing investment Other investment 10.0 6.5 3.4 YoY growth of consumption components (%) 40.0 2.7 0.0 30.0 20.0 -10.0 10.0 0.0 -20.0 -10.0 -20.0 -30.0 -30.0 1T 2T 3T 4T 1T 2T 3T 4T 1T 2020 2021 2022 -40.0 1T 2T 3T 4T 1T 2T 3T 4T Regional demand Investment Final consumption expenditure 2020 2021 1T 2022 Source: IECM Final consumption expenditure Households -AAPP and ISFLSH 13#14Madrid's economy is set to recover more strongly than the national average at the end of 2021 The Madrid economy grew by 6.5% in 2021, one and a half percentage points higher than in Spain as a whole, according to the advanced data provided by the INE. This was mainly driven by household consumption, which grew by 8.3% compared to the sharp fall of 13.6% YoY in 2020. The recovery in investment, with a significant rebound in non-residential investment, is notable. The boost to economic growth in the Community of Madrid during 2021 and the first quarter of 2022 has mostly been driven by the contribution of regional demand (3.1% YoY), in contrast to the slightly contribution of external demand (2.0% YoY). Contribution to YoY GDP Growth YoY growth of regional demand and its components in Q12022 (%) 25.0 20.0 15.0 10.0 5.0 0.0 -5.0 -10.0 -15.0 -20.0 -25.0 3.1 2.0 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2T 3T 4T 1T 2017 -Regional demand contribution 2018 2019 2020 2021 2022 External demand contribution Source: IECM 3% 696 39 3.1% 1.8% Households Regional demand Investment Final consumption expenditure AAPP and ISFLSH 14#15Growth estimates of Community of Madrid in 2022 7.0 Extension of the recovery process launched in 2021 On average, projected growth for 2022 is 5.6% for C. Madrid. The Community of Madrid would return to the pre-Pandemic pattern with a higher rate of economic activity generation than Spain. GDP growth forecasts. Community of Madrid and Spain Real GDP growth rates Upward pressures ✓ Administration of the vaccines to a sufficent % of the population during 2021/2022 and efficacy for other highly contagious variants. ✓ Approval of some efficient treatment against COVID- 19. ✓ Tranfer of the funds of the Recovery and Resilience Facility and REACT EU. ✓ Labour market recovery to be translated into employment gains 5.6 6.0 5.0 4.0 3.0 2.0 1.0 0.0 C. Madrid 5.3 . Spain ■BBVA Research apr-22 ■CEPREDE jan-22 ■Hispalink apr-22 Average Downward pressures × New waves and restrictions during 2022 × Continued high price levels that reduce purchasing power, undermining domestic demand. × Slowdown in the arrival and management of Recovery Funds. 15#16www High labour market dynamism in 2021 The positive seasonality of affiliation in the region in the last quarter of the year has allowed the December figure to mark the third consecutive record high. This momentum has enabled the year 2021 to close with year-on-year growth of 5%, thus surpassing pre-pandemic levels. It continues in January 2022. The accelerated fall in unemployment in the second part of 2021 has contributed to a year-on-year reduction of more than 15% (2022 starts with a reduction of 19% YoY). This improvement is also evident in the unemployment data, with a reduction during the year of 3.4 p.p. to 10.1% (lower than the national average of 3.2 p.p.). Registered unemployment and Social Security Affiliations (YoY %) Unemployment Rate Community of Madrid and Spain 30 30 20 20 10 10 3.4 18.1 0 1.3 -4.4 -10 -20 -30 20192020 dec-20 Source: MISSYM and MTYES 18.0 16.3 16.1 16.0 16.0 15.3 15.3 14.4 14.6 14.0 13.3 13.5 13.3 12.6 12.2 12.1 11.8 12.0 10.6 Affiliation 10.1 10.0 5.3 8.0 6.0 Registerd Unemployment 4.0 -19.0 2.0 0.0 apr-21 aug-21 jan-22 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Source: EPA, INE ■C. of Madrid ■ Spain 160#17Source: Ministerio de Hacienda Murcia Valencia Catalonia Andalusia Galicia Aragon Castile and Leon Total Rioja Extremadura Madrid Castile la Mancha Canary -1.0 Basque Country 10 Cantabria Asturias Balearic Navarre 6'0 www wwww Fiscal Evolution in 2021 versus 2020 The Community of Madrid's historic fiscal discipline has allowed the region to record a better financial balance than the national average. The dynamics in revenues in contrast to the slower pace of growth in expenditure allowed the Community of Madrid to record a surplus of 0.3% of GDP as of Dec-21. Deficit evolution by Autonomous Regions as % of GDP ■2020 end-closed 2021 end-closed 1.3 0.5 0.0 -0.5 Evolution of the public deficit (%GDP) -1.0 -1.0 -1.0 -1.5 -1.4 -1.4 -1.6 -2.0 -1.8 -1.8 -2.0 -2.5 0.3 0.0 0.0 -0.2 -0.3-0.3-0.3 -0.4 -0.5 -0.6 -0.7 -0.9 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 C. Madrid Spain Year-on-year change in non-interest income and expense as of Dec-21 (%) 30.6% 31.1% CAN BAL PVA 23.4% NAV 17.6% 16.1% EXT 14.3% ■YoY non- CNT financial AND 13.3% expenses (%) 13.3% CLM CAT 12.9% ■YoY non- 12.3% financial income TOTAL (%) 11.3% AST MUR 11.0% ARA 10.2% 9.6% RIO CVA 9.2% MAD 4.9% GAL 4.7% CYL -0.3% 17 -0.1 0.0 0.1 0.1 0.2 0.2 0.3 0.3 0.4#18Deficit target. 2022 Forecast The strong revenue dynamics of the Madrid Region, in addition to extraordinary transfers, will contribute to maintaining a deficit level below the regional average by 2021 and 2022. Variation in the fiscal balance forecast for 2021 and 2022 by region (% of GDP) AlReF CC.AA. CC.AA. 2021 2022 2021 2022 Andalusia -0,3% -0,6% -0,5% -0,6% Aragon -0,8% -0,6% -1,1% -0,6% Asturias -0,2% -0,4% -0,5% -0,7% Balearic 0,0% -0,2% -0,2% -0,6% Canary 0,2% 0,4% -0,1% -0,1% Cantabria -0,5% -0,6% -0,8% -0,6% Castile and Leon -0,4% -0,5% -0,7% -0,6% Castile La Mancha -0,8% -0,7% -1,2% -1,1% Catalonia -0,6% -0,8% -1,1% -0,6% Extremadura -0,4% -0,6% -0,4% -1,7% Galicia -0,5% -0,4% -0,9% -0,6% Madrid -0,1% -0,3% -0,1% -0,6% Murcia -1,2% -1,7% -1,2% -1,1% Navarre -0,2% -0,2% -0,2% -0,9% Basque Country -0,1% 0,0% -0,5% -0,9% Rioja -0,6% 0,0% -0,7% -0,6% Valencia -1,2% -1,7% -0,9% -0,6% Regional Government -0,2% -0,6% -0,6% -0,7% Source: Deficit of AIREF GDP % 18#19Autonomous Regional Financing System and additional transfers The Autonomous Communities will receive a total of 112.138 billion euros in payments on account during the financial year 2022. In addition, the State will compensate the regions for a volume of 7 billion euros for the implementation of the VAT Information Supply System in 2017 and for the negative settlements of the SFA for 2020. The Community of Madrid will receive a total of 16.56 billion euros in 2022. State account transfers, 2019-22 (EUR mn) Extraordinary transfers in 202-2022 (€m) 2022 2021 2020 2019 Catalonia 19,020 2020 19,685 Galicia 7,431 7,595 7,557 2021 2022 2022/2021 19,711 21,057 8,080 2022/2019 6.8% 10.7% 2017 VAT liquidation Estimated 2020 liquidation Extraordinary Covid Fund Fund 6.9% 8.7% Andalusia -537 -1,141 2,358 2,199 Andalusia 19,218 19,748 19,636 20,943 6.7% 9.0% Aragon -80 -260 403 431 Asturias 2,740 2,794 2,761 2,924 5.9% 6.7% Asturias -86 -134 308 299 Balearic -78 0 330 438 Cantabria 1,805 1,845 1,842 1,987 7.9% 10.1% Canary Islands 0 0 629 551 La Rioja 971 998 992 1,071 8.0% 10.3% Cantabria -46 -142 168 177 Murcia 3,138 3,259 3,220 3,412 6.0% 8.7% Castile and Leon -182 -345 741 843 Valencia 9,433 9,788 9,731 10,270 5.5% 8.9% Castile La Mancha -130 -350 605 743 Catalonia -443 -374 2,161 3,171 Aragon 3,540 3,646 3,630 3,860 6.3% 9.0% Extremadura -86 -202 318 277 Castille-La Mancha 4,923 5,056 5,016 5,333 6.3% 8.3% Galicia -204 -368 828 735 Canary Islands 4,540 4,740 4,703 5,047 7.3% 11.2% Madrid -377 -432 1,864 3,346 Extremadura 3,069 3,123 3,069 3,315 7.1% 8.0% Murcia -85 -57 422 389 Balearic Islands 1,980 2,069 Madrid Castille-Leon Total 14,432 6,494 102,735 2,092 14,814 14,993 15,755 6,617 6,542 6,936 105,803 105,523 112,138 2,148 2.7% 8.5% Rioja -20 -100 94 127 Valencia -281 0 5.1% 9.2% Total -2,635 -3,904 1,400 12,629 1,486 15,212 6.0% 6.8% Excess announced 6.3% 9.2% Announced transfers* -465 -3,100 0 0 -3,904 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. 19#20wwwww www www www Economic strengths of the region Dynamic rebound of the economy started in the second half of last year, with a positive differential in favour of the region, especially notable in Q4 and extending into the second and third quarter of 2021. Significant contribution of domestic demand to the region's growth, focused on household consumption and investment. Leadership in new businesses creation. A diversified productive structure with a wide presence of large companies. Positive dynamics in the labor market. Highest % of students in higher education in Spain (47,8%). 1 in 5 professionals in Spain works in Madrid (more than one million professionals) Madrid is the most deregulated low-tax economy in Spain and the one most open to foreign trade/investments. 20 20#21Tax comparison The Community of Madrid's policy on regional taxes aims at a flexible tax regime that favors the creation of companies and economic dynamism. In this sense, Madrid applies bonuses / deductions on certain key taxes such as Patrimony, Patrimonial Transmissions or Documented Legal Acts, while maintaining tax collection at high levels thanks to the business-friendly ecosystem. It should be noted that the tax rates and deductions shown in the following table are of general application. However, the tax regulation establishes other deductions with a more residual application. Comunidad of Madrid Catalonia Andalusia Castile and Leon PIT Wealth tax Tax rate Only taxed over 18.5-43.5% 700,000 € Tax rate Tax rate Discount of 100% 7.65-34% 21.5-48% 500,000 € 0.21-2.75% 7-32% 19.5-48% 700,000 € 0.24-3.03% 7.65-36.50% Inheritance tax Groups I y II: 99%; Bonuses Group III: 10-15% Groups I y II: 99%-20% Inheritance and Gift tax Gift tax WTT Tax rate Bonuses Tax rate 7.65-34% Groups I y II: 5-9% Groups I y II: 1.000.000€*; Group III y IV disabled people: 250.000€* 7.65-36.50% 19-44% 700,000 € 0.2-2.5% 7.65-34% Groups I y II: 100- 80% 7.65-34% Groups I y II: 99%; Group III: 10-15% 6% Wealth Transfer Tax and Stamp Duty SD Tax rate 0.75% 10-11% 8-9-10% 8-10% 1.50% 1.50% 1.50% *Maximum deductible amount Source: Community of Madrid. 21#22Investment in R&D www www. €4.25bn investment in R&D (2020) 3.7% increase on previous year 27% of total Spanish spending in R&D (first region in expenditure) Second region by investment as % GDP (2.0%), +56 basis points compared with the national average. Investment in R&D as % GDP (2020) Basque Country 2.2% Madrid 2.0% Navarre 1.9% Catalonia Total 1.7% 1.4% Castile and Leon 1.4% Valencia 1.2% Murcia 1.1% Galicia 1.1% Andalusia 1.1% Aragon 1.0% Cantabria 0.9% Asturias 0.9% Rioja 0.8% Castile La Mancha Extremadura Canary Islands Balearic 0.7% 0.6% 0.6% 0.5% Source: INE 22 22#23Madrid leads business creation in 2021 The Community of Madrid keeps its leadership in terms of company creation, even registering higher levels than in 2019. One out of every five businesses created in Spain is located in the Community of Madrid (23.5%). In addition, Madrid is characterized by being a net receiver of companies where, up to November, 1,985 companies have moved to Madrid, compared to an outflow of 1,416 companies. In terms of subscribed capital, the Community of Madrid accounted for 20.1% of the total in Spain in 2021, second only to Catalonia. Companies set up Accumulated as of nov-2021 Companies set up montly Community of Madrid Rest of Spain 40.3% Andalusia 17.2% 3,000 Catalonia 19.0% 2,500 2,000 1,500 Source: Community of Madrid, INE 1,000 Madrid 23.5% 500 jan feb mar apr may jun jul aug sep oct nov dec 2019 2020 2021 23 23#24wwww Madrid, preferred destination for foreign investment In the first nine months of 2021, the Community of Madrid received an investment of €7.88bn, 63.8% of the national total. Basque Country- 2.5% Valencia 4.8% Andalusia 5.4% - Castile La Castile and Balearic Mancha Leon 1.4% 1.4% 1.8% Catalonia 15.4% Source: Ministerio de Industria, Comercio y Turismo Community of Madrid 63.8% 24#25Competitive advantages Sector Weights breakdown of Spanish regions Wholesale & Retail Information & Communication CCAA Farming Industry Construction commerce. vehicle repairs. hospitality. transport. storage. activities Services Finance & Insurance Real Estate activities activities Technical & Scientific activities and auxiliary Public Administration. Defense. Social Art. Culture and Security. services Education. Healthcare and Social Services Entertainement. Total Services activities. 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% 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% Catalonia 1% 19% 5% 25% Comunitat Valenciana 2% 19% 7% 25% Extremadura 10% 13% 7% 19% Galicia 5% 18% 7% 23% 2% Community of Madrid 0% 10% 5% 24% Murcia 6% 18% 6% 24% Navarre 4% 30% 6% 19% Basque Country 1% 24% 7% 21% Rioja 7% 26% 6% 19% Ceuta 0% 5% 5% 21% Melilla 0% 4% 6% 19% SPAIN 3% 16% 6% 24% ON ON ON ONE ON ON ON off of off 1% 3% 11% 4% 21% 5% 64% 3% 4% 12% 10% 15% 5% 74% 2% 4% 13% 7% 17% 5% 72% 1% 4% 11% 5% 26% 4% 70% 3% 10% 7% 19% 4% 69% 10% 6% 10% 15% 15% 5% 85% 1% 3% 10% 6% 20% 4% 69% 2% 3% 9% 7% 16% 4% 60% 3% 3% 11% 8% 17% 5% 68% 2% 4% 10% 5% 17% 4% 61% 1% 2% 10% 4% 47% 4% 89% 1% 2% 11% 5% 47% 4% 90% 4% 4% 12% 9% 18% 5% 75% Higher exposure than the average to the service sector (85%). Although the peculiarity of the crisis has had a greater impact on those regions with a greater weight in the tertiary sector, especially in tourism due to mobility restrictions, the good pace of vaccination could lead to higher potential growth and a stronger recovery. 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 might actually have stronger recovery; information, communications, finance, IT, scientific activities, etc. 25 25#26www Competitive advantages The Madrid region registered in 2019 (latest available data) a competitiveness index above, not only Spain but also above. the EU countries. Additionally, Madrid's airport (Adolfo Suárez Madrid-Barajas) ranks as the 1st Spanish airport and the 5th in Europe by the number of passengers and freight traffic. On a national basis, Madrid is the epicenter of the national road and rail network due to a well developed public transport network which covers the whole region. EU Regional Competitiveness Index (2019) Efficiency Sub-index Basic Sub- index Innovation Business Sophistication RCI 2019 Innovation Sub-index Institutions Technological Readiness 100 Market Size Labour Market Efficiency Source: European Comission. ■ EU Average ■SPAIN Spain: Comunidad de Madrid Macroeconomic Stability Index <-1 -1 -0.5 -0.5 -0.2 -0.2 0 0-0.2 0.2 0.5 0.5 1 > 1 Infrastructure Health Higher Education and Basic Education Lifelong Learning 26#27CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid II. FUNDING PROFILE#28Normative 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. 28 20#29Debt ratios of the Community of Madrid The Community of 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). Evolution Debt / GDP (%) 2022 1Q CCAA Debt (€ mill.) Debt/GDP (%) Canarias 6.222.061 14.4 Comunidad Foral de Navarra 3.063.528 14.4 Comunidad de Madrid 34.830.785 14.6 C& 45 40 35 País Vasco 11.125.149 15.2 30 Galicia 11.314.321 17.4 25 La Rioja 1.559.596 17.4 Principado de Asturias 4.323.299 18.3 20 Castilla y León 12.944.652 21.2 15 Andalucía 35.864.706 21.6 Aragón Cantabria 8.544.134 22.0 10 3.258.826 23.0 Extremadura 4.937.566 23.1 Illes Balears 8.564.001 29.0 0 Castilla-La Mancha 14.904.906 34.2 Región de Murcia 11.513.024 34.9 dic 11 dic 12 dic 13 dic 14 Cataluña 83.721.808 35.7 Comunitat Valenciana 53.048.946 46.0 National Average 309.741.309 25.1 Source: Bank of Spain ⚫CCAA dic 15 dic 16 dic 17 dic 18 dic 19 CyL CAT MAD dic 20 mar 21 PVA jun 21 sep 21 dic 21 mar 22 29 29 25,1 21,2 15,2 14,6 35,7#30Gross Financing Needs 2022 Refinancing of long-term debt redemptions in 2022 2,892 Negative settlement 120 monthly payments 55 MM (DA 36th, Law 2/2012, 29 june) MM Déficit 2022 (0,6% Regional GDP) 1,519 MM Agencia Vivienda Social, (Lt) debt 0.985 MM TOTAL FINANCIAL NEEDS 2022: 4,467 MM TOTAL 2021 ISSUED : 2,131 MM AMOUNTS (€ million) Source: Comunidad de Madrid 30 30#312022 Debt Strategy 1. Funding needs: EUR 4,5 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. 31#32Rating and debt ratios Moody's S&P DBRS FITCH Baa1 A- A- BBB Current Rating Outlook Date Stable 05/11/2022 Positive 05/06/2022 Positive 09/09/2022 Stable 09/02/2022 Comunidad de Madrid National Total 2019 2020 2021 2022 1Q 2019 2020 2021 2022 1Q Debt/GDP (%) 13.9 16.0 Debt 33,469 34,601 14.8 34,409 14.6 34,831 23.7 295,080 27.1 303,992 25.9 312,585 25.1 309,741 2019 2020 Comunidad de Madrid 2021 2022 1Q 2019 Spanish Tresury 2020 2021 2022 1Q Debt Average Cost (%) 2.19 1.91 1.86 1.87 2.21 1.87 1.65 1.55 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 1.94% (August 2022) Source: Comunidad de Madrid, INE and Bank of Spain Considering rights and obligations *Cost: Spanish Treasury 32 22#33The main characteristics of the debt Distribution bonds/loans Loans Currency distribution Type % Public entities Private entities 23.10 76.90 Total % Loans 37.75 Bonds 62.25% Bonds Loans 37.75% Type Euro Foreign currency % 100.00 0.00 Euro 100% Total % Bonds 62.25 Distribution fixed/variable Floating 11.52 A commitment to fixed-rate issuances is a strength: - Reducing risks. - Reducing volatility when making payments. Fixed 88.48% Maturity Distribution Short term 0.54% Long term 99.46% Source: Comunidad de Madrid. (*) SEC 2010 Update: 31/12/2021 *Public entities: European and Spanish (ICO) Financial Institutions *Private entities, Private Banks 33#34Funding Activity mill.€ 6.000 € 5.000 € 4.000 € 3.000 € 2.000 € 1.000 € 0 € 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Loans ■Bond Source: Comunidad de Madrid Sustainable Green Health Social Madrid, regular player in Capital Markets. Financing Needs 2022 34#35mill.€ 4000 3500 3000 2500 The main characteristics of the debt 2000 1500 1000 500 ....... 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 33-36 37-42 43-45 2046 47-52 2053 2058 60-61 2066 Source: Comunidad de Madrid Bonds ■Loans 35 55#36Source: Comunidad de Madrid 1,5 2010 2 Average cost and average life % 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 2,27 2,21 2,19 5,5 5,51 5,34 2011 2012 2013 2014 2015 2016 2017 Average Cost Average Life 2018 The average maturity of debt is 8.06 years (August 2022) 2019 2020 Years 8,38 8,5 8,33 8 7,67 7,39 7,5 1,91 1,86 6 5,5 2021 5 6,5 36 36 7#37mill.€ 2.000 1.800 1.600 1.400 1.200 1.000 800 600 400 200 Comunidad de Madrid: Benchmark Transactions 0 17/07/23 21/05/24 30/09/24 30/04/25 30/04/27 Green Bond 30/04/27 30/04/28 • • Extraordinary investor's response. Source: Comunidad de Madrid • High international support, very well diversified in geographical terms. Common features of these operations: Outstanding quality of the orderbook: Demand driven by real money investors. 30/07/28 Tap 30/04/29 12/03/30 Sustainable 30/04/30 30/04/31 30/04/32 ■Public 37#38Deals Breakdown Amount Tenors Average Maturity 2022 Loans 1,237,000,000 11-19 11.83 Private Placements 100,000,000 20 20,00 Public Benchmark (Sustainable) 1,000,000,000 10.05 2,337,000,000 11-20 11.42 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 2020 Loans 2,142,000,000 3-47 10.63 Private Placements 804,000,000 3-32 27.23 Public Benchmark (Sustainable) 1,250,000,000 10.17 Public Benchmark (Green) 700,000,000 7.23 4,896,000,000 3-47 12.75 Source: Comunidad de Madrid 38 38#392021/2022 Notes Issuance Program OUTSTANDING DEBT OF THE PROMISSORY NOTE PROGRAMME Operation Note Total Amount € mill Settlement Date Maturity Date 25,000,000.00 07/18/2022 10/18/2022 25,000,000.00 Comunidad de Madrid received authorization in February 2020 for a Notes Issuance Program of up to 500 million euros over a 5 year period. In October 2020 the authorization was extended up to 1.000 million In 2021 Comunidad de Madrid issued 3 Promissory Notes, with a total amount of 142,6 million euros. In 2022 one Promissory Note has been issued, with an amount of 25 million euros. The current amount of outstanding promissory notes is 25 million euros. It is an opportunity to obtain liquidity by taking advantage of market conditions, increasing the short term debt capacity Interest has been generated in favor of Comunidad de Madrid for the notes issued amounting to 781.000 euros. • The average cost for all the transactions is -0.344% and the average issue Price is 100.125%. Source: Comunidad de Madrid 39#40€1bn 1.723% due 30th April 2032 BY REGIONS SWITZERLAND 6% OTHER 6% NORDICS 3% ITALY 7% BENELUX 17% 6° Sustainable Public Deal BY INVESTOR TYPE OFFICIAL INSTITUTIONS 2% SPAIN 27% BANKS 39% GERMANY/AUSTRIA 15% UK 8% FRANCE 11% 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% 40 40#412022 Bond Profile BY REGIONS SWITZERLAND 5% OTHER 5% NORDICS 3% ITALY 15% BOND TRANSACTIONS BY INVESTOR TYPE OFFICIAL INSTITUTIONS 2% ASSET MANAGERS 35% SPAIN 25% BANKS 35% GERMANY/AUSTRIA 14% BENELUX 15% FRANCE 10% UK 7% Source: Comunidad de Madrid AMOUNT ISSUED 1,100,000,000 € INSURANCE COMPANIES AND PENSION FUNDS 27% 41#42€1bn 0.42% due 30th April 2031 BY REGIONS 5° Sustainable Public Deal OTHER 6% PORTUGAL 2% NORDICS 5% ITALY 12% BENELUX 5% UK 5% SPAIN 25% GERMANY/AUSTRIA 24% FRANCE 16% BY INVESTOR TYPE OFFICIAL INSTITUTIONS 5% BANKS 37% OTHERS 2% ASSET MANAGERS 44% INSURANCE COMPANIES AND PENSION FUNDS 12% • First public benchmark issued by any Spanish Regions in 2021. • TOTAL AMOUNT 1,000,000,000 € Tightest level over SPGB ever printed in a syndicate deal by Comunidad de Madrid • 75% placed outside Spain • 69% ESG investors Source: Comunidad de Madrid 222 42#43€500 bn 0.16% due 30 July 2028 BY REGIONS OTHER 2% NORDICS 3% BENELUX 14% FRANCE 10% SWITHERLAND 7% 2° Green Public Deal BY INVESTOR TYPE OFFICIAL INSTITUTIONS 8% SPAIN 28% BANKS 38% ITALY 18% GERMANY/AUSTRIA 18% TOTAL AMOUNT 500,000,000 € • Second pubic syndicated green deal. ASSET MANAGERS 38% INSURANCE COMPANIES AND PENSION FUNDS 16% Strong demand from foreign investors, who represent 72% of the total operation. Large participation of ESG investors, 64%. Source: Comunidad de Madrid 225 43#442021 Bond Profile BY REGIONS SWITZERLAND 1.45% PORTUGAL 1.45% | NORDICS 3.62% ITALY 23.19% OTHER 4.35% BENELUX 3.62% UK 3.62% FRANCE 13.77% Source: Comunidad de Madrid BOND TRANSACTIONS BY INVESTOR TYPE OFFICIAL INSTITUTIONS SPAIN 18.12% OTHERS 1.06% 4.79% CENTRAL BANK 2.66% ASSET MANAGERS 33.51% BANKS 32.45% GERMANY 28.26% AMOUNT ISSUED 1,880,000,000 € INSURANCE COMPANIES AND PENSION FUNDS 25.53% 44 44#45CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid III. SUSTAINABLE FINANCE#46Sustainability Mandate of Comunidad de Madrid Comunidad de Madrid has the clear social and environmental mandate to meet the needs of its citizens. The Region is committed to integrate sustainable development and social responsibility in all its activities while playing a key role to promote sustainable development initiatives on the territory. Social expenditures includes several programs such as the financing of public polices related to public health, education, social services, employment promotion, public transportation, and subsidized housing. The community of Madrid's expenditure on social programs aims 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 in small businesses. Additionally, Comunidad de Madrid has an important environmental mandate. Almost 50% of the region area of the region 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. Regarding the latter, the region set out its Strategy for Sustainable Waste Management for the 2017-2024 period. In relation to climate change and air quality, the Plan Azul+ 2013-2020 has been the backbone for eight years, particularly focusing on 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 region's general sustainable strategy: • • • • Transportation: modernisation of the 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 In the social category, there is a Strategy for Social Inclusion 2016/2021, within the framework of the Europe 2020 Strategy, which seeks to eradicate severe poverty from the region. Source: Comunidad de Madrid 46#47Rationale for Sustainable Financing Comunidad de 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, Comunidad de Madrid contributes to its social and environmental policies and actions Alignment of the funding strategy with the sustainability strategy By issuing Sustainable Finance Instruments, Comunidad de 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 Comunidad de 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 environmental and social benefits Source: Comunidad de Madrid 47#48Sustainable Finance Framework Alignment to the Standards Comunidad de Madrid Sustainable Finance Framework complies with: . ICMA Green Bond Principles, Social Bond Principles², Sustainability 2 Bond Guidelines³ • LMA Green Loan Principles4 3 ICMA Comunidad de Madrid Sustainable Finance Framework's pillars Use of Proceeds Project Evaluation and Selection Management of Proceeds • • 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 The Sustainability Bond Guidelines Reporting Loan Market 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. Comunidad de Madrid might hire an external party to audit the allocation of proceeds Under the Green Finance Framework, Comunidad de Madrid can issue Sustainable Finance Instruments which include Green, Social, Sustainability bonds, thematic bonds, private placements and loans https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ https://www.icmagroup.org/green-social-and-sustainability-bonds/social-bond-principles-sbp/ 1. 23. 2. 3. https://www.icmagroup.org/green-social-and-sustainability-bonds/sustainability-bond-guidelines-sbg/ 4. https://www.lma.eu.com/application/files/9115/4452/5458/741 LM Green Loan Principles Booklet V8.pdf Source: Comunidad de Madrid 48#49Second Party Opinion by Sustainalytics¹ 1. Use of Proceeds By financing social housing, CdM directly supports Spain's State Housing Plan Comunidad de Madrid 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 lead 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 SUSTAINALYTICS SECOND- PARTY OPINION Evaluation date Issuer Location March 27, 2020 Madrid, Spain Evaluation Summary Sustainalytics is 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 following USE OF PROCEEDS The sixeligible categories for the use of proceeds (Affordable Housing (0) Education (1) Healthcare (Social Inclusion (V) Economic Inclusion and SME Financing (vi) Climate Change and Environmental Management are aligned with those recognized by both the Green Bond Principles and the Social Bond Principles Sustainalytics considers the eligible categories outlined in the Comunidad de Machd 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 Eligible programmes are evaluated and selected by a dedicated intemal Selection, Monitoring and Evaluation Committee The Committee 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 deneral Budget Sustainalytics considers the project evaluation and 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 fecal year of the issuance and/or to the fiscal year preceding the year of the issuance. In case full elocation at issuance is not possible the unallocated proceeds will be held and/or invested in Comunidad de Madrid's liquidity portfo pending full allocation. REPORTING Comunidad de Madrid intends to report on the allocation of proceeds on its website within approximately one year from the date of issuance and until the proceeds have been 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 social eligible category Sustainalytica views Comunidad de Madrid's allocation and impact reporting se aligned with market practice Report Sections Introduction Sustainalytics Opinion Appendices For inquires, contact the Sustainable Finance Solutions project team Evan Bruner U Project M evan [email protected] (+31) 20 2050027 Jean-Claude Berthelot (Amsterdam) Client Relations jean-claude bertheloteuatsinalytica.com (+31) 20 205 00 15 Sun 2020 3 11 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 The full Second Party Opinion is available at: http://www.comunidad.madrid/inversion/relacion-inversores/deuda-sostenible Source: Comunidad de Madrid 49 49#50Use of proceeds: transparent and audited programs Eligible categories Affordable Housing Education Healthcare Brief category description Provision of affordable housing and shelter to disadvantaged populations Provision of education to the youth (including disadvantaged groups) and support of public schools and universities Program in the General Budget 261B Amount in € million (2022) 120.5 232A/322A,B,C,F/ 324M 1,340.5 Support to Madrid's Public Healthcare System and financing of high impact medicines against rare diseases 312A 3,080.4 Social Inclusion Economic Inclusion and SME Financing Climate Change and Environmental Management • 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 ticket price) Provision of goods and services to the elderly and the mentally and/or physically disabled SMEs financing Employment promotion and advancement, including people with distance to labour market Waste management Clean Transportation Environmental conservation and biodiversity 232B/231A,C,F,D,E / 232A,B,E/241A,M 261B/322A,B,F/ 422B/431A / 433A/ 453N / 463A 241A,M/422B/ 431A/433A / 463A 2,680.6 543 422B453N / 456A,N 813.7 Source: Comunidad de Madrid 50 50#51Contribution to the UN SDGS Comunidad de Madrid Sustainable Finance Framework contributes to the achievement of the EU 2030 Agenda for Sustainable Development SUSTAINABLE DEVELOPMENT GOALS WE SUPPORT 1 POVERTY GOOD HEALTH AND WELL-BEING Affordable Housing (Target 1.4) Social Inclusion (Target 1.1 and 1.B) Healthcare (Target 3.8) Comunidad de Madrid B THE GLOBAL GOALS For Sustainable Development SUSTAINABLE DEVELOPMENT GOALS (11) Source: Comunidad de Madrid ་་་ W L QUALITY EDUCATION GENDER EQUALITY DECENT WORK AND ECONOMIC GROWTH SUSTAINABLE CITIES AND COMMUNITIES 13 ALONE CLINATE 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#52Management of Proceeds An amount equivalent to the proceeds of the Sustainable Finance Instruments will be allocated to a mix of environmental and social projects and provision of service. All amounts can be traced back to Madrid's General Budget for a specific fiscal year. The use of revenue may include capital and operating expenditures of eligible project categories and programs, as well as indirect lending to projects such as grants for private and public organizations and consortiums for special purposes. Only Comunidad de Madrid's own expenditures (net of EU grants, EIB loans, state grants or other revenues earmarked for specific purposes) are eligible. Specific chapters of the relevant budgetary programs that will be excluded are: - Personnel expenditures (Chapter 1 of the budgetary programs), Financing costs (Chapter 3 of the budgetary programs), Contingency Funds (Chapter 5 of the budgetary programs), Financial assets (Chapter 8 of the budgetary programs), except for art.87-89 - Indirect investments in projects such as grants for private and public companies and consortiums for relative framework purposes. Financial liabilities (Chapter 9 of the budgetary programs) It is possible to issue multiple Sustainable Finance Instruments as long as the total amount of funding does not exceed the amount of eligible programs in the annual budget. The proceeds of sustainable finance instruments will be allocated to eligible programmes in the General Budget of Comunidad de Madrid, corresponding to the fiscal year of the Sustainable Finance Instrument issuance and, in case necessary, to the preceding fiscal year. An external auditor will verify the amounts within one year from the date of the Sustainable Finance Instruments issuance. Comunidad de Madrid ensures that the systems and processes as specified above meet their requirements over the lifetime of the instrument. Source: Comunidad de Madrid 59 52#53Projects List ELEGIBLE CATEGORY Affordable Housing Education Health TABLE OF SUSTAINABLE BOND PROJECTSA1:C45 NAME OF PROJECTS 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. Repair of uninhabited social housing for their second allocation. Neighbourhood Assistance Service of the Community of Madrid. ASIVECAM. Attention to students with specific educational support needs. Maintenance of Secondary Education Centres. Training and awareness-raising for women in situations of social exclusion. Scholarships for advanced vocational training. Refuerza Programme (academic support and reinforcement activity). Book lending programme. ACCEDE Programme. Educational compensation classrooms. High-impact medicines and orphan drugs. Collaboration with Local sector Collaboration with professional bodies. Mobile Drug Dependency Service. Collaboration with citizens' organisations. Reduced school menu prices. Economic benefits in situations of dependency. Home help in situations of dependency. Care for the elderly in centres. Subsidies for public transport users. Care for the elderly in centres for the elderly. Comprehensive care in residential centres for women victims of gender violence. Care in social canteens. Care in non-residential centres for women victims of gender violence. Economic benefits for the social integration of women victims of gender violence. Free school transport service for pupils in special education centres. Social Inclusion Free transport service for students with physical disabilities. Free school canteen service for pupils in special education centres. Free school transport service for pupils in shantytowns. Participation and integration centres (CEPI). Volunteer school. Housing First Programme. 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). Subsidies for integration projects linked to the Minimum Insertion Income (RMI). Development Cooperation Subsidies. Pre-commercial public procurement. AMOUNT 18,467,366.00 3,595,806.00 16,915.00 1,789,092.00 4,160,509.00 1,049,388.00 1,821,170.00 14,105,084.00 2,186.00 15,318,014.00 1,982,200.00 39,244,743.00 713,194.00 667,000,000.00 47,533.00 35,440.00 2,050,000.00 500,000.00 26,477,744.00 230,755,559.00 64,390,949.00 309,567,803.00 1,199,370,832.00 14,018,990.00 5,345,778.00 2,832,968.00 7,135,443.00 229,839.00 5,858,983.00 3,176,094.00 2,598,539.00 529,220.00 2,052,294.00 110,355.00 507,490.00 1,325,784.00 69,312.00 427,671.00 46,639,336.00 4,900,000.00 4,177,840.00 0.00 Economic Inclusion and SME Financing Climate change and the environment Aid for the promotion of technological sectors Consortia. Subsidies for the promotion of technological sectors. Start-ups Aid for the use of innovation services in SMEs Innovation vouchers. Aid for industrial SMEs Industry 4.0 projects. Aid to Innovation Intermediary Entities. 2,500,000.00 809,160.00 609,302.00 1,597,922.00 188,956.00 Maintenance and support for the management of the air quality network. 1,194,116.00 TOTAL 2,711,396,91 53 53#54Reporting Framework example: Sustainability Bond Allocation Reporting 2021 Comunidad de Madrid Sustainable Finance Allocation Reporting 2021 Eligible Sustainability Project Portfolio Amount (EUR) Allocation of green funding Amount (EUR) Affordable Housing 29,079,076 Sustainability Bonds 1,000,000,000 Education 73,186,591 Social inclusion Economic inclusion Environmental Management 669,632,973 1,932,598,823 5,705,340 1,194,116 Eligible Sustainability Project Portfolio € 2,711,396,919.00 Sustainability Funding € 1,000,000,000 % of Eligible Sustainable Project Portfolio allocated: 36.9% Source: Comunidad de Madrid % Sustainable net proceeds allocated: 100% 54 54#55Impact Reporting Indicators Comunidad de Madrid will report over the most important social and environmental impacts produced by the eligible programs, based on the impact indicators. The following is a sample of the indicators by category: Eligible category Affordable housing Education Healthcare Social inclusion Economic inclusion Clean Transportation¹ Sample of impact indicators Number of vulnerable individuals or families benefiting from subsidized housing Number of supported special education centers Number of education programs or professional development aimed at young people in risk of exclusion Number of people with rare diseases who are provided access to adequate services and medication Number of supported victims of domestic violence (in terms of housing, financial, and other) Number of individuals or families who benefit from social minimum income Number of SMEs that receive support for equipment and facilities and technological modernization Number of electric vehicles acquired New points of electric vehicle recharge Annual GHG emission reduced/avoided Waste Management Environmental conservation and Biodiversity Amount of recycled or composted waste (tons) Area/Number of Protected Natural Parks and other areas with unique conservation value where there has been an intervention 1. Comunidad de Madrid may hire an external expert consultant to perform the impact reporting calculation of the indicators for this category Source: Comunidad de Madrid 55 55#56Reporting Framework example: Sustainability Bond Impact Reporting 2021 Project category Target population Eligible Project Category SDG Addressed Target Group (if applicable) Budgetted amount Affordable Housing Goal 1: No Poverty Goal 11: Sustainable Cities and Communities Disadvantaged and underserved groups MEUR Allocation information Impact indicators Allocated to sustainable bond Share of Total Budget Number of beneficiaries Other impact indicators (amount) Financing % Number Unit of measure Additional Indicators number / unit of measure 29,079,076 € 29,079,076 2.9% 119 Families with social housing Number of social housing units acquired 137 Number of students with academic 24 Number of Education Goal 4: Quality education Youth, disadvantaged groups € 73,186,591 € 73,186,591 7.3% 434.114 Number of vulnerable students scholarships professional training 8 Goal 3: Good Healthcare Health and Well-being Citizens (including disadvantaged and underserved groups € 669,632,973 € 419,632,973 42.0% 271 Goal 1: No Poverty Social inclusion SDG 5: Gender equality Disadvantaged and underserved groups € 1,932,598,823 € 471,201,904 47.1% 1.636.007 higher degree Number of public schools (0-18 years) 1 Number of people with a rare disease being provided access to services and adequate medication Number of people treatment 35 medication high impact Number of individuals or families benefiting from social benefits Number of Number of individuals or families benefiting of social minimum income Number of victims of gender violence supported Number of subsidized trips Goal 4: Quality education Economic inclusion Goal 8: Decent SMEs and long-term work and € 5,705,340 € 5,705,340 0.6% 139 unemployed SMEs that received support economic growth Total a/ b/ c/ d/ e/ f/ Environmental management Goal 13: Climate Action € 1,194,116 € 1,194,116 0.1% € 2,711,396,919 € 1,000,000,000 100.00% 2,070,650 Eligible SDGs which are adressed by the financed portfolio/project and fit to the choosen SBP (sub)category Signed/budgetted amount committed by the issuer for the portfolio or portfolio components eligible for Sustainability Bond financing. This is the share of the total portfolio cost that is financed by the issuer. This is the share of the total portfolio costs that is Sustainability Bond eligible. Based on either the expected economic life or financial life of the portfolio. Impact indicators Source: Comunidad de Madrid 14,550 families 24 2,664,720 Number of annual data for air quality parameters 1,178,220 Number of annual data meteorological parameters 1,464,357 509 56#57• 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 • 5 Sustainable benchmark public bond issues since 2017 • 38% of Sustainable Bonds in Comunidad de Madrid's annual issuance in 2021 Largest amount outstanding in Sustainable Bonds (5,803 MM) Transparent and public reporting on projects financed by under the framework Amount (€ million) Settlement Tenor 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 Source: Comunidad de Madrid 57 57#58IV. GREEN BOND CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid#59Inaugural Green Bond 2020: Use of Proceeds Eligible Category Overview of the Green Use of Proceeds 2020 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 SUSTAINABLE CITIES AND COMMUNITIES 456N 456B and territorial planning EU Objective 4: Circular economy Climate change and environmental management Clean transportation: • Promote the manufacture and use of 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 13 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 456A EU Objective 1: Climate Change Mitigation ON LAND EU Objective 6: protection and restoration of biodiversity and ecosystems 59 59#60Green Projects for the 2020 Inaugural Green Bond Clean Transportation ENT EMT MADRIO • 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 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 finances efficient mobility and new forms of urban mobility: the purchase of electric bicycles with pedal- assist systems, electric scooters and electric mopeds, as well as environmental vouchers for the use of zero-emission shared mobility services Benefits will result in better air quality in the region and will direct efforts towards the decarbonization of transport Comunidad de Madrid strongly supports the decarbonization of the Region's public transport while have the clear guidelines to help to reduce pollutant and GHG (Greenhouse Gas) emissions and to increase the share of renewable energies in the overall consumption of the transport system Source: Comunidad de Madrid 60 60#61Green Projects for the 2020 Inaugural Green Bond Waste Management The Regional Strategy defines a waste management model that responds to the needs of the Community of Madrid, taking into account environmental, social and economic aspects The main objectives of the Strategy are as follows: To prevent the generation of waste in the Community of Madrid Maximize the transformation of waste into resources, applying the principles of the circular economy Encourage the use of Best Available Techniques in waste treatment ✰ To define criteria for the establishment of the necessary infrastructures and for the correct management of waste in the Community of Madrid Pinto light packaging sorting plant Financing the policies to manage pollution and waste in dense urban areas while mobilizing resources towards a circular economy The financing of the total amount of domestic waste treatment for several municipalities in the region of Madrid as well as assistance for the collection of such waste from some municipalities planazul+ Financing the optimally evaluate the air quality of the Community of Madrid through measurements of the concentrations of regulated air quality pollutants and regulated air quality pollutants and meteorological parameters, with the aim of protecting people's health and the environment, providing full information to citizens and other competent administrations. Comunidad de Madrid assumes all waste collection and treatment costs of municipalities with populations of less than 1,000, and 50 % of the costs of municipalities with populations of between 1,000 and 2,500. The regional strategy gives great attention to the Prevention Programme Source: Comunidad de Madrid 61#62Green Projects for the 2020 Inaugural Green Bond VALDEBERNARDO VICALVARO Conturaiales Environmental Conservation Comunidad de Madrid finances the maintenance and restoration of public Natural Parks in the Region One of the them is the Valdebernardo park, peri-urban park located at the eastern end of the Valdebernardo neighborhood, which covers 108 hectares and which offers a variety of 180.540 trees and numerous sports facilities and children's areas • The Region of Madrid plans, coordinates and manages the Network of Centres for Environmental Education. These centres are located in areas of natural interest or areas of recreation within high- density populations Activities carried out in these centres promote initiatives for the protection and conservation of the environment, and sustainable management of natural resources Financing of Non Profit Organizations dedicated to the preservation, defense and recovery of the region's natural heritage and the prevention of any losses in biodiversity This is done through Non Profit Organisations whose purpose is among the aforementioned and carry out their activity within the Region of Madrid Comunidad de Madrid takes very seriously the mandate of protecting, restoring and enhancing green public areas, while contributing to the sustainable development of populations around Natural Parks Source: Comunidad de Madrid 62 62#63Region of Madrid Inaugural Green Bond Final Terms and Conditions Issue Ratings Baa1/A-/BBBu/AL (Sta/Pos/Sta/Pos) Moody's/S&P/Fitch/DBRS Regs, Bearer Dematerialised (No sales into Canada) Senior, Unsecured Format Ranking Size EUR 700MM Maturity 30th July 2027 Settlement Coupon Reoffer Price Reoffer Spread 8 May 2020 (T+7) 0.827% Fixed, Annual, Act/Act - Short first 100.001% (Yield 0.827%) SPGB (mid yield 0.637%) +19bps area Ref SPGB 0.8 07/30/27 HR 98% Benchmark Listing AIAF Min Denoms Bookrunners ISIN CB 5% INS & PF 18% €1k+ €1k BBVA (B&D), CACIB, ING, Santander ES0000101966 Investor Type BENELUX 3% REST 1% GBR 5% ITA FUND 40% SWI 3% 7% FRA 7% NOR 7% Geography Transaction Highlights . On Tuesday April 28th 2020, the Autonomous Community of Madrid successfully launched their first Green bond (EUR 700MM due 30th July 2027), following 5 days of OoO calls with over 20 European ESG investors • One day before, on April 27th mid-day the mandate was announced together with IPTS of SPGB +28 bps. By the EoD, lols were over 1.8bn from 119 accounts. Given this extraordinary reception from investors, books opened the next day at 9:00 am with a guidance of SPGB +25 bps area. Just 1 hour from book opening (10:00 am) an update was released, indicating books over €3 Bn (excl. JLMs) and revising Guidance to SPGB +22 bps area. At 11.10 CET a second update was released, setting the spread at SPGB +19 bps, with Books exceeding € 3.5 Bn (excl JLMs) and going subject at 11.35 CET • At 12.15 pm Final Terms were announced, setting the size at €700 Mill. The landing Pricing level of SPG +19 bps shows a tightening of 6 bps vs. Guidance (-11 bps vs IPTS) and is Flat vs the Issuer Secondary curve (No NIP) • DEU 41% • The total demand for the deal exceeded 3.5bn from 172 investors. Comunidad de Madrid managed to print a very successful deal (4.1x oversubscription) in a very challenging environment due to the COVID 19 crisis at Zero New Issue Premium, thanks to the high oversubscription facilitated by the Green Bond category The excellent quality of the book was reflected in the strong demand from dedicated ESG investors (64%), international accounts (61%), and real money investors (58% from Investment & Pension Funds and Insurance Companies). BANKS 37% ESP 26% 63 65#64Highlights of the 2020 Madrid's Inaugural Green Bond ច First Green bond issued by a Spanish Region Comunidad de Madrid has a strong and unanimous commitment to climate change mitigation and environmental protection. The transition to a low-carbon development model that has no way back, and the region wants to be at the forefront Our inaugural green bond is a clear sign of the region's commitment to promote the ESG bond market and sustainable investments Climate change and environmental management is the green bond category in focus in the debut green bond of Comunidad de Madrid. The proceeds of the bond have been allocated to expenditures in clean transportation, sustainable waste management and environmental conservation EU Great execution metrics: 4.1x oversubscription after receiving EUR3.5bn of investor's orders Strong demand from dedicated ESG investors (64%). Source: Comunidad de Madrid 64 50#65Inaugural Green Bond 2020: Impacts Overview of the Green Use of Proceeds Impact Indicators Main Eligible expenditures UN SDGs Allocated Amount (EUR m) Allocated Subcategories Amount (EUR Managed Waste (tn) Data Samples Collected m) Emissions Avoided (tCO2) Vehicles Subsidize d Number of Intervened Programmes Surface (ha) Projects Selected 11 SUSTAINABLE CITIES AND COMMUNTHS Waste Management Domestic Waste Management 5.2 284,297.1 A 5.9 Maintenance of the 0.7 Air Quality Network EMT Bus 68.0 SUSTAINABLE CITES AND COMMUNITIES Intercity Bus 91 1,466,702.0 2,939.7 18,642.8 Metro 387.8 90,147.8 Clean Transportation 683.6 13 ACTION CLINATE Measures for the Promotion of Sustainable Mobility 3 2,300.0 Light Train 133.8 4,330.7 Environmental 1.3 15.0 Education Conservation of Protected Natural 3.7 118,527.0 Areas Connectivity through 3.8 581.0 Green Infrastructure Environmental 15 FE ON LAND 10.4 Conservation Protection of Wetlands 0.2 13.0 Recovery and improvement of 0.9 210.0 private forest areas Grants to NPOs with Environmental 0.5 11.0 Purposes 700.0 700.0 65 55#66Inaugural Green Bond 2020: Impacts in the Region's Public Transport A D:D • Metro: the equivalent distance travelled by car would have caused 314,801 tCO2 emissions • EMT bus: the equivalent distance travelled by car would have caused 5,558 tCO2 emissions. Investments included the acquisition of 50 electric buses for a sum of EUR 35m Intercity bus: the equivalent distance travelled by car would have caused 45,231 tCO2 emissions. Investments included the acquisition of 12 hybrid buses for a sum of EUR 8.4m Light trains: the equivalent distance travelled by car would have caused 5,157 tCO2 emissions Emissions avoided by Clean Transportation initiatives funded by the Green Bond proceeds are equivalent to in excess of those of 95,900 passenger vehicles per year* 2020 Emissions Avoided (tCO2): 237,381.66 *http://calcarbono.servicios4.aragon.es/index.html Impact calculated based on a reference travel distance of 15,000 km per year by a typical diesel car 99 66#67Case Study: Arco Verde Manzanare Monte PARQUE REGIONAL CUENCA ALTA DEL MANZANARES orrelodon Las Matas Dehesa de Navalcarbón Dehesa Las Rozas MUP BOADILL Monte de Monte de El Pardo El Pardo Majadahon Valle de El Garzo S 6A Montes S 6B del Pilar y Pozuelo Monte Valdelata e Viñublas MUP VIÑUELAS PONTE DE Dehesa MUP DEHESA BOX San Sebastián de los Reyes ALDELATAS Alcobendas EL 1A C Parque Forestal Cervunal Paracuellos del Jarama de Valdebebas Monter de Boadilla Boadilla del Monte Las Presillas Casorio del Henare Mejorada Parque Forestal Valdebernardo del Campo VALDEBERNARDO Wethis de San Antonio Villaviciosa de Odón Alcorcón Perales Leganés Rivas Vaciamadrid del Rio scos VAnexos Parque Polvorancay Getafe de Rivas Arganda del Rey •POLVORANCA Bosque Sur B Fuenlabrada ( CANTUENA So Cantueña Alhóndiga Bosque Sur A BOSQUESU PARQUE REGIONAL CURSO MEDIO RIO GUADARRAMA PARQUE REGIONAL DEL SURESTE Arco Verde is a project aimed at bringing nature closer to the metropolitan areas of the region, favouring its use and enjoyment without the need of using private vehicles, thanks to its connection with the existing transportation network By planting new trees and bringing nature closer to the city for immediate public use, 3.4 million tonnes of CO2 will be avoided, supporting the region's fight against climate change Promotion of behaviours which are respectful with nature and a sustainable use of the environment, through interactive programmes carried out by the Environmental Education Centres around the Arco Verde ⚫ It will also benefit the region by setting a new guideline in the territorial and urban development of the metropolitan area of Madrid Some figures • 540,000 native trees and shrubs planted • More than 200 km of refurbished paths and roads 。 25 new biodiversity areas o 26 municipalities benefitting from it O 30 forest spaces and 5,000 ha of green and natural spaces connected 3,837,638 euros invested in 2020 40 67#68Case Study: Plan APARCA+T • This is an ambitious plan, which aims to promote the use of park and ride facilities in the region, unifying their management from the Regional Transport Consortium, providing the existing network with a homogeneous image and conditions of use, expanding this network with new spaces and facilities to reach more than 90 parking lots with a supply of around 50,000 spaces The added value of the plan consists of a series of service improvements: 1. Free parking for intermodal users, i.e. those who use the parking lots to continue their journey by public transport, and for whom the Community of Madrid will assume the costs of this free parking 2. Increase in the supply of places 3. The integrated management of parking lots from the Madrid Regional Transport Consortium, through a management platform, which will allow the transfer of data and images to CITRAM, which in turn allows real-time management of information on available parking spaces, incident management, obtaining demand data, etc. 4. Development of an App for direct access to the Network's parking lots after user registration and direct exit once the Public Transport Card has been validated against the cell phone 5. In more advanced stages, the incorporation of dynamic information systems in the access corridors to Madrid, which together with the App, will inform users in real time of the location of the parking lots and the best route to access them; the degree of occupancy and the number of free spaces, frequencies and schedules of the modes of transport associated with the parking lot, etc. 6. Other associated services such as the installation of electric recharging points, reservation of places for carsharing, car rental by the hour, motosharing, bicycle loan systems, workshops, ATMs... The Plan is long-term, lasting 12 years, which includes 3 Phases (designed to achieve a homogeneous temporal development of the supply of parking spaces integrated in the system); 1. First Phase (2022-2024): Estimated investments of around 75 million euros (tender budget including VAT) in 25 parking lots and 16,760 parking spaces, of which some 6,000 are new 2. Second Phase (2025/2027): Investments have been estimated at around 65 million euros (tender budget including VAT) in 33 parking lots (29 identified and 4 under study) and 15,020 parking spaces 3. Third phase (2028/2030), it is planned to invest some 61 million euros (tender budget including VAT) in 33 parking lots (30 identified and 3 under study) with 14,360 spaces. The APARCA+T park-and-ride network would therefore consist of 91 parking lots and an investment of more than 200 million €. A pilot project has been developed for the implementation of a Technological Platform for the integration and management of the APARCA+T Network: Colmenar Vejo parking lot (the first parking lot to be integrated into the Network) Inaugurated on January 13, 2020 and operating normally, with the exception of the large decrease in the use of the parking lot due to the pandemic. As contemplated in the Agreement, the pilot test was carried out during 2020. Occupancy data, since February 2020, an average of 1,195 users per month and total of 13,146 users in the first 11 months of the service (adding those who validate from the app and through the ATM). Data was strongly influenced by mobility restrictions due to the pandemic. 68 898#69Clean Transportation 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: 2020 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) Fuel/electrical energy consumption of vehicle fleets o Kms traveled per year Railway modes: 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 2019 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. 69 69#70Thanks 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. 70#71ANNEXES CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA Comunidad de Madrid#72Overview of outstanding Sustainable transactions Settlement Maturity Amount Settlement Maturity Amount BILATERAL LOANS Social Loan 2016 2026 20.000.000 SUSTAINABLE PLACEMENT Private Placement (Social) 2016 2031 48.000.000 Sustainable Loan 2017 2032 240.000.000 Sustainable Loan 2018 2032 340.000.000 Sustainable Loan 2018 2028 39.000.000 Sustainable Loan 2019 2030 50.000.000 Private Placement (Sustainable) Private Placement (Sustainable) Private Placement (Health Social) 2018 2058 238.000.000 2020 2050 265.000.000 2020 2023 52.000.000 Sustainable Loan 2019 2029 97.000.000 Sustainable Loan 2019 2030 220.000.000 Public Benchmark (Sustainable) Public Benchmark (Sustainable) 2017 2022 700.000.000 2018 2028 1.000.000.000 Sustainable Loan 2020 2023 100.000.000 Public Benchmark (Sustainable) 2019 2029 1.250.000.000 Sustainable Loan 2022 2033 100.000.000 Public Benchmark (Sustainable) 2020 2030 1.250.000.000 Green Loan 2022 2034 300.000.000 Sustainable Loan 2022 2037 100.000.000 Public Benchmark (Sustainable) 2021 2031 1.000.000.000 SUPRANATIONAL LOANS Sustainable Loan 2018 2027 70.000.000 Public Benchmark (Sustainable) GREEN BOND 2022 2032 1.000.000.000 Sustainable Loan 2020 2029 130.000.000 Health Social Loan 2020 2033 140.000.000 Health Social Loan 2020 2035 465.000.000 Public Benchmark (Green) Public Benchmark (Green) TOTAL 2020 2027 700.000.000 2021 2028 500.000.000 8.003.000.000 Health Social Loan 2020 2035 135.000.000 Health Social Loan 2020 2033 51.000.000 Health Social Loan 2021 2034 9.000.000 Sustainable Loan 2022 2035 Health Social Loan 2022 2041 TOTAL 10.000.000 200.000.000 2.816.000.000 TOTAL SUSTAINABLE 10.819.000.000 Source: Comunidad de Madrid 72#73Debt 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 Tesorería. 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 73#74Debt 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 prepares the 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 orden to 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 74#75Affordable 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 75#76Education 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. Comunidad de Madrid finances public education for all, and devolves particular attention to allocate resources to guarantee access to education for disadvantaged students Source: Comunidad de Madrid 76#77Healthcare . • • 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 77#78Social 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 Pr 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 78#79Economic 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 MEMORIA DE PROGRAMA INDESTRIA 1211 DG DE INDUSTRIA, ENERGIA Y MINAS La Dirección General de Industria, Energia y Minas tiene de la eficiencia energética, para reducir e cudedenos madrileños, consiguiendo esi incremental reducir muestre dependencia energética y coedyurar al Uno de los instrumentos más destacados de esta polit que, además del ahorro de energía y la reducción d seguridad de las instalaciones y mentalizar los Gu importancia de la eficiende energétics. Desde el año 2 cabo aproximadamente 115.000 actuaciones, con lo acumulade cercano a 200.000 toneladas equivalentes e de emisiones ceara 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 Diocide Gener Comunidad de Madrid En este sentido, con el fin de ca se considera necesario llevar a cabo actuadores e 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 s industriales, lo que redundarà en una mejora de as co actividad, y, por tanto, en una mejora de su competitive En esta linea, se incentivará también la mejora de a medarte la sustitución de lámparas y luminar energéticamente y la instalación de reguladores de fi 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 est movilidad más sosten ble En concreto, se apoyará la r recarga cuyo desplegue permitirá cubrir las necesidade consumo de energia, reduciendo a la vez su incidencia d En 2019 se connari, par tarto, con el fomento de para lograr un despliegue que permita la diversificacion -11- PROGRAMA MEMORIA DE PROGRAMA 4A ECONOMIA 12016 DG DE ECONOMÍA, ESTADISTICA Y COMPETITIVIDAD Sigale ladiectious marcadas por el Gobierno de la Comunidad de Madrid, se consideran ajes prioritarios de la definición do is Politica fennomies Regionalla poemarie y dotarelle scanóminn y empresarial para lo que se precisa una rápida adiotación a sauna Financiere y su transferencia al mundo em uma pérdida de compettivided site incluse as nuevas circunstancias que permitan no sólo e liderer el proceso de innovación tecnológica. La primers fise de este procese de mejora de lo competitividad empresarial se realita a través de la realuación de informes, estudios e investigatiores que permitan conocer tendencias en el comportamiento de la economia regionaly de sus diferents sectores, y, en consecuenca, permitan grever posibles Incas de actuacion para las policas pública en favor del tejido empresente y, en especial de las pecudes y medianas mpras madrileña que están siendo afecta en kuncionamiento y viabilidad. Es w desamalle de estos instrumentos y labores do andliti se numaron la permanente y activa colaboración de losongansmos y asociaciones representantes del tejido enpresarial Otro de los objetivos primordiales en materia de desarrollo económico es el apoyo a las politicas de mejor de la cosomia madriela y de an sectores productivos, a través del impulso la competitividad y el empleo, por medio de la elaboración de planes y progiemas de actuación de sectos y colective expecfons E este mae y de acerle con la competencies signed rate Discoón General se establecen las lineas de actuación a fin de conseguir una actuación ágil, efica eficiente y próxima a las necesidades de la economia regional Por todo ello, en este ejercicio, se sigue apostando por el mayor conocimiento y análisis de la realidad económica se a egian y por el imputo à la creación y desarrollo de nuevo tejido empresarial, entre os que cabe destacar los aguentes Dubión de estudi sobre diferentes te strategin y apetes levantes de la economic madrileña, sea de forma directs, neda ese trabajo interno, sea a través de apoyo extern a por medio de colaboraciones con empresasu organismes specializados Divulgación y publicación de las actuaciones de apoyo a la actividad empresarial por parte da Dirección General Promocion delconocimiento de la realidad socoronamica traves de diferentes fores, seminarios y jornadas sobre le economie y el empleo en la regkin, asi como a través de diverses publicaciones. Asdisisy prospectiva del entorns económico ragional, tanto an relación con el resto de regiones pañolas come con la principales regiones europe. Desemolo y promoción econimica y financiera del tejido empresarial de Madrid, con especial atención a las pres Apoyo y gestión del reefianzamiento de protectos de versión de presa traves de Avelar 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 79#80Climate 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 00 80