#1CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid INVESTOR PRESENTATION August 2023#2TABLE OF CONTENTS 1. MACRO OUTLOOK AND FORECASTS 2023 II. FUNDING PROFILE AND STRATEGY III. SUSTAINABLE FINANCE 2023 & IMPACT REPORT 2022 IV. GREEN FINANCE 2023 & IMPACT REPORT 2022#3CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid I. MACRO OUTLOOK AND FORECASTS 2023#4Community of Madrid key figures ↑ GDP pc 2021* 34.821€ (Madrid) 25.498€ (Spain) * Last official data available Average annual population growth (2011-2021) +0.5% (Madrid) +0.2% (Spain) ↑ Stock of companies 2022 558.607 +2,11% YoY. (Madrid) 3.430.663 +1,90% YoY. (Spain) ↓ CPI Data (May-2023) +2,4% YoY. (Madrid) +3,2% YoY. (Spain) ⇓ Unemployment rate (20231Q) 11,01% (Madrid) 13,26% (Spain) GDP: 258 bn € Population: 6,8 mil % National: GDP: 19,5% Population: 14,3% Source: Community of Madrid, and INE ↑ ICTs Services (1Q2022) Region best positioned in advanced digital services such as Artificial Intelligence or Big Data ↑ R&D expenditure (2021) 2.63% over GDP (Madrid) 1.43% over GDP (Spain) Foreign Investment 50,4% of the National Total (2022). 4#5www The Community of Madrid in Spain The regional GDP of the Community of Madrid in 4Q22 managed to recover its pre-pandemic level with growth of 5.0% YoY, while the evolution of the national economy as a whole was not as positive. In terms of population, the Community of Madrid relative share over the national population stands at 14.3% at the end of 2021, with a total population of 6.751.251 (out of a national total of 47.385,107). Contribution by region to national GDP (2021) Population distribution by Autonomous Community (2021) Madrid Catalonia Andalusia 19,4% 19,0% 13,3% Valencia 9,3% Basque Country 5,9% Galicia 5,2% Castile - Leon 4,8% Castile la Mancha 3,5% Canary 3,5% Aragon 3,1% Murcia 2,7% Balearic 2,5% Asturias 1,9% Extremadura 1,7% Navarre 1,7% Cantabria 1,1% Rioja 0,7% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% Source: Community of Madrid, INE, Economy* Andalusia Catalonia Madrid 18,0% 16,2% 14,3% Valencia 10,7% Galicia 5,7% Castile and Leon 5,0% Canary Islands 4,7% Basque Country 4,6% Castile- La Mancha 4,3% Murcia 3,2% Aragon 2,8% Balearic 2,6% Extremadura 2,2% Asturias 2,1% Navarre 1,4% Cantabria 1,2% Rioja 0,7% 0,0% 5,0% 10,0% 15,0% 20,0% 5#6wwww The Community of Madrid in Europe In 2021, Madrid was ranked as the fifth largest regional economy in the EU and the largest in Spain. Madrid continued outperforming both the national and EU GDP growth average during 2022 and early 2023. Region Country GDP (€ million)* GDP PPS (€ million) UE - 27 14.524.808 14.524.808 Ile-de-France Lombardia Francia Italia 764.844 705.575 403.136 412.745 Oberbayern Alemania 296.742 267.201 Rhône-Alpes Francia 250.293 230.898 Community of Madrid España 234.639 248.519 Eastern and Midland Irlanda 229.934 191.815 Catalonia España 229.417 242.988 Stuttgart Alemania 228.221 205.501 Düsseldorf Alemania 227.643 204.981 Darmstadt Alemania 218.548 196.791 Istanbul Turquía 209.481 519.956 Köln Italia 199.040 179.224 Lazio Irlanda 197.535 202.244 Noord-Holland Países Bajos 183.078 157.638 Provence-Alpes Côte d'Azur Países Bajos 181.067 167.036 Source: Eurostat *Year 2021 6#7The Madrid economy resumes its recovery in an uncertain global context 11,0 Gross Domestic Product Rates of change in real terms 6,0 3,6 2,9 2,3 2,0 1,0 -4,0 -9,0 -14,0 2018 Gross Domestic Product Community of Madrid 8,0 6,7 6,3 5,7 7,0 6,5 5,5 5,7 5,5 6,0 5,0 4,0 10 5,0 3,0 2,4 2,3 2,0 1,0 0,0 1 2022 0,1 5,0 0,1 IV 2022 Quarter-on-quarter rate of change Year-on-year rate of change -10,3.11,3 II 2022 III 2022 2019 2020 2021 Comm. of Madrid 2022 ■Spain Source: IECM. Data adjusted for seasonality and calendar effect 2022 Source: IECM and INE (CNE) • In a context driven by inflation and uncertainty, the economy of Madrid maintained considerable momentum in 2022, mainly in the first six months, with the intensity of growth becoming more moderate in the second half of the year. Community of Madrid GDP: +5.7% 2022 vs 2021 (SPAIN: +5.5%) 7#8Regional momentum anticipates the recovery of pre-COVID activity levels 30,0 20,0 Gross Domestic Product Year-on-year actual rates of change 25,4 10,0 4,9 5,0 6,7 6,3 5,0 3,9 3,2 3,1 2,8 2,6 1,7 -2,0 -2,7 0,0 -5,5 -10,0 -20,0 -30,0 -24,0 -9,0 1-19 11-19 III-19 IV-19 1-20 11-20 111-20 IV-20 1-21 II-21 III-21 IV-21 1-22 11-22 III-22IV-22 1-23 Source: IECM, INE and EUROSTAT Data adjusted for seasonality and calendar 110,0 100,0 90,0 80,0 70,0 Madrid ----Spain Gross Domestic Product Index IV-2019=100 UE20 IV-19 I-20 11-20 III-20 IV-20 1-21 1-21 III-21 IV-21 1-22 11-22 III-22 IV-22 1-23 Source: Drafted based on data from IECM, INE and EUROSTAT Madrid ----Spain UE-20 2022 was conditioned by several factors on a global scale: persistently high inflation, interest rate hikes, the invasion of Ukraine and its consequences, etc. GDP Community of Madrid 23Q1: +1.3% Q-0-Q (0.5% Spain) +3.9% Y-o- Y (3.8% Spain). In 23Q1, Madrid GDP was 2.2% above pre-pandemic levels (19Q4), a level it surpassed in 22Q2; Spain was 0.9% below in 22Q4 and still remains 0.2% below in 23Q1. 8#9Distribution by sector in 2022 The regional economy has a high weight in the services sector, with 85.2% vs. the national average of 75.6% in 2021. The community of Madrid has been affected to a greater extent by the pandemic, due to the high weight in the services sector and specifically the link with tourism, which subsequently resulted in a greater recovery. Composition of constant GVA by sector in Madrid, 2022 (% of total) Agriculture 0,1% Composition of constant GVA by services sector in Madrid, 2022 (% of sector total) Services 83,6% Industry 10,5% Construction 5,8% Source: INE Other services 25,4% Distribution and Hospitality 27,2% Business and Financial services 47,4% 9#10www Composition of the two main categories of the services sector in 2021 By composition of the Distribution and Hospitality category in 2021, the most important subsector is wholesale trade (28.1%). Within Business and Financial Services, more than half corresponds to Real Estate Activities (26.5%) and Information and Communications (26.3%). Composition of constant GVA by breakdown of the Distribution and Hotels & Restaurants category in Madrid, 2021 (% of total category) Composition of constant GVA by breakdown of the category Business and Financial Services in Madrid, 2021 (% of total category) Transportation and storage 25,0% Wholesale trade 28,1% Catering 19,8% Retail trade 27,1% Financial Services 17,5% Administrative Fuente: Instituto de Estadística de la Comunidad de Madrid, INE activities 13,3% Information and communications 26,3% Professional activities 16,4% Real Estate Activities 26,5% 10#11The regional economy has already fully recovered to pre-pandemic values in activities accounting for 72% of GVA 110,0 Major sectors in the Community of Madrid Index IV-2019=100 GVA services Index IV-2019=100 110,0 100,0 100,0 90,0 80,0 90,0 80,0 70,0 60,0 50,0 40,0 70,0 IV-19 I-20 11-20 I-20 IV-20 1-21 II-21 III-21 IV-21 I-22 11-22 III-22 IV-22 1-23 IV-19 I-20 11-20 I-20 IV-20 1-21 II-21 III-21 IV-21 I-22 11-22 III-22 IV-22 1-23 Drafted based on data from IECM Agriculture Construction Industry Services Drafted based on data from IECM Distribution and hospitality Serv. to businesses and financ. GVA seasonally adjusted and calendar GDP pm GVA seasonally adjusted and calendar Other services Services ✓ YoY growth across all sectors in 23Q1, albeit more subdued than in 22Q4. ✓ Services sector +3.8% 23Q1 vs +5.2% 22Q4 (11.7% above 19Q4) Notable growth in distribution and hospitality services, although they are still 2.9% below 19Q4. ✓ Construction +3.5% 23Q1 vs. +2.2% 22Q4 (2.3% above 19Q4) ✓ Industry +4.2% 23Q1 vs +5.3% 22Q4 (13.7% above 19Q4) 11#12A less favourable global macro backdrop will slowdown growth of regional demand in 2023 ● Year 2022 Consumption continued to recover, although at a more moderate rate of 3.9%, with greater momentum in household consumption (5.2%) than in general Public Administration consumption (0.8%). • New investment boost, with an increase of 6.6%; reactivated investment in housing (4.2%) and a robust pace in the rest (7.7%). Increase in contribution of external demand to 1.7 points. 2023Q1 Consumption and investment in the Community of Index IV-2019=100 • Internal demand +2.5% 23Q1 vs +3.7% 22Q4 External demand +1.6% 23Q1 vs +1.6% 22Q4 120,0 110,0 Investment +4.0% 23Q1, with both components gaining momentum: 100,0 >> Inv. Housing +4.7%, albeit 18.3 points below 19Q4. 90,0 >> Rest of investment +3.7%, 6.7 points above 19Q4. 80,0 • Final consumption expenditure +2.2% 23Q1: » household consumption +2.2% 23Q1, 2.9 points below 19Q4. 70,0 60,0 >> Public Admin consumption +2.3%, 10.9 points above 19Q4. 50,0 IV-19 I-20 11-20 III-20 IV-20 1-21 ||-21 |||-21 IV-21 1-22 11-22 11-22 IV-22 1-23 Drafted based on data from IECM Data adjusted for seasonality and calendar Consumption households Consumption Public administrations Inv. housing Other inv. 12#13Unemployment level at lowest level since 2008 Evolution of registered unemployment. Year-on-year rate of change. 0 -5 -10 -15 -20 -25 -3,16 -6,29 -30 aug-21 nov-21 feb-22 may-22 aug-22 nov-22 feb-23 Source: Ministry of Labour, Migration and Social Security Y-O-Y RC Madrid may-23 Y-O-Y RC Spain ✓ Continuous decline in the number of unemployed, dropping below pre-COVID levels and reaching values not seen since 2008. ✓ May23: 305,094 unemployed, -3,16% YoY, -11.2% vs Apr19. ✓ Permanent contracts account for about 45% of new contracts in May23, more than double the pre-pandemic volume. 13#14Social Security Enrolment at an all-time high Average monthly enrolment in Social Security Community of Madrid and Spain Thousands of affiliations 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 Affiliations May 2023: 3.654.135 0 abr.-15 abr.-16 abr-17 abr-18 abr.-19 abr-20 abr.-21 abr.-22 Source: MISSYM Level CM Annual RC CM (right axis) 6.0 4,0 2,0 0,0 -2,0 -4,0 -6,0 abr.-23 Year-on-year rates of change (%) Annual RC Spain (right axis) ✓ Enrolment in the region is at an all-time high, exceeding 3.5 million almost every month since Nov 22. ✓ Apr2023: 3,547,671 absolute all-time high +4.0% vs may22, +10.2% may19 All-time high among both men and women and for enrolments in the general scheme. Best April in the series for the self-employed. 14#15Significant boost in active population in the region - LFS 66 64 62 60 58 56 54 52 50 Evolution of activity rate 63,3 58,6 1-15 source: Spanish Labour Force Survey (its; also referred to by its Spanish acronym EPANE 1-23 Community of Madrid Spain 25 20 15 10 5 Evolution of unemployment rate 13,3 11,0 0 I-15 Source: Spanish Labour Force Survey (§; also referred to by its Spanish acronym EPA, INE 1-20 1-21 1-23 Community of Madrid Spain ✓ Activity rate CM ➤ • 63.3% 23Q1 vs 63.9% 22Q1. The highest of all the Autonomous Regions. ➤ Comparison conditioned by a 22Q1 of particular activity rate growth. Activity rate SPAIN 58.6% 23Q1 vs 58.5% 22Q1. ✓ Unemployment rate CM 11.0% 23Q1 vs 11.8% 22Q1. • Unemployment rate SPAIN 13.3% 23Q1 vs 13.6% 22Q1. 15#1610,0 8,0 6,0 4,0 2,0 0,0 -2,0 Inflation coming down quickly on lower energy prices 12,0 Evolution of prices in Madrid and Spain General and underlying inflation Contribution to inflation by components Community of Madrid 10,0 may.-18 Source: INE nov.-18 may.-19 nov.-19 may.-20 nov.-20 General CM General SPA may.-21 nov.-21 may.-22 nov.-22 may.-23 2,0 8,0 88 69 6,0 4,0 40 0,0 20 -2,0 ང་ sep-20 nav-20 Underlying COM Underlying SP Source: Own elaboration based on INE data. ene-21 mar-21 may-21 jul-21 sep-21 nov-21 Unprocessed food Processed foods Services Underlying ene-22 mar-22 may-22 jul-22 sep-22 nov-22 Energy products BINE General Inflation ene-23 mar-23 may-23 ✓ Negative CPI 2020 ✓ Climbing begins March 21 SPAIN 9,8% mar22, 10,8% jul22, 10,5% aug22, 7,3% oct22, 5,7% dec22, 6,0% feb23, 3,3% Mar23; 4,1% Apr 23, 3,2% May 23 CM 9,0% mar22, 9,6% jul22, 9,3% aug 22, 6,3% oct22, 4,9% dec22, 5,2% feb23, 2,6% mar23, 3,4% Apr 23, 2,4% May 23 Underlying inflation SPAIN > 2% since dec21; above headline since dec22 SPAIN 6,4% aug 22, 6,2% oct22, 7,0% dec22, 7,6% feb23, 7,5% Mar23, 6,6% Apr 23, 6,1% May 23 ✓ Underlying inflation CM, the lowest of all the Autonomous Communities. CM 5,4% auo22, 5,2% oct22, 6,0% dec22, 6,4% feb23, 6,2% Mar23, 5,5% Apr 23, 4,9% May 23 ✓ Leading indicator May23: general inflation 3,2% (-0,9 vs Apr), underlying 6,1% (-0,5). 16#17Inflation in the Community of Madrid in the regional context Inflation Regional max and min, Community of Madrid and Spain 14,0 12,0 10,0 8,0 6,0 4,0 20 2,0 0,0 -2,0 -4,0 jul.-20 sep-20 nov.-20 ene-21 mar-21 may-21 jul.-21 sep.-21 nov.-21 ene.-22 mar-22 may-22 jul.-22 sep.-22 nov.-22 ene.-23 mar.-23 - Total may-23 ■ C. Madrid • CPI in the Community of Madrid has been the lowest among all Spanish regions for months. Source: INE 17#18GDP growth estimates of the Community of Madrid in 2023-2024 2,5 On average, growth in the Community of Madrid is expected to be in May-Jun between 1.4% and 2.1% YoY matching or exceeding the forecast for Spain in all cases. (vs.[1.5%-2.0%] in May-jun). GDP growth forecasts. Community of Madrid and Spain Real GDP growth rates Summary of projections 2023 Rates of change of real GDP* 2,0 1,8 1,5 1,0 0,5 Summary of projections 2024 Rates of change of real GDP* 4,00 3,50 3,00 1,7 2,50 2,5 2,1 0,0 C. Madrid Spain BBVA Research jun-23 Hispalink jun-23 FUNCAS may-23 CEP REDE may-23 * Average 2,00 1,50 1,00 0,50 0,00 C. de Madrid BBVA Research jun-23 CEP REDE may-23 España Hispalink jun-23 -Average Issues to follow: ✓ ✓ Developments in the war in Ukraine. Polarisation of blocks and its implications. ✓ Overall weakening of global demand. ✓ Effectiveness of monetary policy measures in anchoring inflation expectations. Response of activity and employment to current and future changes in the public policy mix. Risk of financial fragmentation stemming from the high levels of public debt and possible territorial asymmetry of the current adjustment stage. Stakeholder confidence in a context of high levels of uncertainty. Challenge: cohesion of the European Union and its positioning in the new global geopolitical framework. 18#19Madrid leads business creation The Community of Madrid maintains its leadership in terms of company start-ups with a total of 1.868 in April 2023. This level exceeds the levels recorded in previous years. Madrid leads commercial companies created YTD with 21,7% over the national total. Commercial companies created (Percentage over the national total April 2023) Companies set up montly Community of Madrid Rest of Spain 39,7% Andalusía 17,5% Source: Community of Madrid, INE C.Madrid 21,7% 3.000 2.500 2.000 1.500 1.000 Catalonia 21,2% 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ■2019 2020 2021 ■2022 2023 19#20Madrid, preferred destination for foreign investment During 2022, the Community of Madrid received an investment of 17,225.8 million euros, 50.4% of the national total. wwww Castile-La Mancha 1,7% Navarre 2,3% Murcia Aragón 1,6% 1,4% Andalusia 3,7% Source: Ministerio de Industria, Comercio y Turismo Valencia 6,0% Catalonia 11,4% Basque country 16,1% Community of Madrid 50,4% 20 20#21Exports Community of Madrid (Mill.€) www www. International trade at record highs Accumulated exports through December reached €59,079 million, which represents a record high in 2022. The evolution at the beginning of 2023 is very favorable, even surpassing the levels recorded in 2022. Imports exceeded the levels of previous years, with a cumulative figure up to the end of the year of 110,618 M€. In April 2023, imports decreased compared to April 2022 and in the first four months of the year were similar to those recorded in the same period last year. By product, pharmaceuticals and fuels drive domestic exports in 2022 and 2023. On the import side, the energy component is the most relevant. Evolution of the 5 most exported TARIC sectors (year accumulated) 2023 2022 2021 2020 2019 2018 2017 2016 Source: AEAT 14.000 12.000 10,000 8.000 6.000 4.000 2.000 0 abr-16 abr.-17 abr-18 abr-19 abr-20 abr-21 abr-22 abr.-23 2023 2022 71 Stone, metal, Price, jewelry 2021 2020 84 machines and mechanical devices 2019 87 motor vehicles; 2018 tractor 2017 27 fuels, mineral 2016 ois 30 pharmaceutical products 19.082 59.079 40.368 29.470 31.179 29.963 30.001 28.760 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 Full year Accumulated Apr Imports Community of Madrid (Mill.€) 32.488 110.618 82.921 63.080 64.591 61.643 60.862 58.363 0 20.000 40.000 60.000 80.000 100.000 120.000 Full year Accumulated Apr Source: AEAT Source: AEAT 21#22Investment in R&D remains strong 4,538 M€ of R&D investment in the Community of Madrid (2021). Basque Country Madrid Investment in R&D as % GDP (2021) www +6.7% growth over the previous year. 2,3% 1,9% Navarre Catalonia Total 1,9% 1,8% 1,4% 1,4% Valencia 1,2% Galicia 1,1% Murcia 1,1% 1,1% Aragón Cantabria Asturias Castile la Mancha Rioja 1,0% 1,0% 0,9% 0,8% 0,8% Extremadura Canary Balearic 0,7% 0,6% 0,5% Source: INE 26,3% of total Spanish R&D expenditure (first region in terms of expenditure). Second region in investment as a % of GDP (1,9%), +50 basis points compared to the national average. Castile - Leon Andalusia 22 22#23www wwww Fiscal deficit in 2022, although more contained than the regional average The historical fiscal discipline of the Community of Madrid has allowed the region to deliver a better fiscal execution than the regional average on a consistent basis. The lower volume of transfers from the State resulted in a decrease in non-financial resources in contrast to the higher rate of growth in spending, which caused the Community of Madrid to record a deficit of 0.7% of GDP as of Dec-22 (compared to - 1.1% of GDP for the regional average). Deficit evolution by Autonomous Regions as % of GDP ■2021 end-closed 2022 end-closed 0,5 0.0 Evolution of the public deficit (% GDP) 0,3 0.0 0,0 -0.5 -0,3-0,3-0,1 -0.2 -0,4 -0.5 -0.6 -0.7 -1,0 -0,9 -1.0 -1,0 -1.5 -1,6 -2,0 -1.8 -1,8 -2.0 -2,5 -0.7 -1,1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ■C. Madrid Spain *Year-on-year change in non-interest income and expense as of Dec-22 (%) 11,8% NAV PVA 2,3% 0,1% RIO GAL -1,3% CNT -2,2% -3,2% AST ■Y.o.Y. non- financial -3,4% ARA expenses (%) -4,0% AND -5,4% TOTAL ■Y.O. Y non- -5,5% financial income (%) CVA -6,6% MUR EXT -7.1% -7.4% MAD CAT -7,8% -8,9% CYL CLM -9,3% -10,7% BAL CAN -11,1% -20% -15% -10% -5% 0% 5% 10% 15% 20% Source: Ministry of Finance *Note: Data obtained from the budget execution of the Autonomous Regions at the end of 2022.. 23 23#24www. Fiscal dynamics in 2023 The decrease in current transfers received -due to the SII-VAT disbursement in the first quarter of the previous year- and the increase in non-financial expenses, specifically with the employee remuneration item, resulted in a deficit of (-0.16% Y.o.Y) compared to the slight surplus (0.03% Y.o.Y) recorded in the same period of the previous year. AIReF expects Madrid to reach a balanced budget in 2023. Deficit evolution by Autonomous Regions as a % of GDP *Year-on-year change in non-interest income and expenditure to Mar-23 (%) ■March 2022 ■March 2023 0,8 CVA -0,3 BAL.0,8 -0,4 MUR 80- -0.1 CLM -0,4 MAD 110'0- -0,2 0,00 CAT -0,2 TOTAL ■ 0,03 -0,2 CAN 0,04 0'0 AND z'o -0,1 ARA 0,2 -0,2 CYL 0,2 0,0 EXT 0,3 -0,2 PVA 0,3 0.2 CNT 0,3 -0,1 RIO 0,3 0,0 GAL 0,4 0'0 AST 0,5 0,3 NAV 0,0 9'0- Source: Ministry of Finance -5,3% -4,1% ARA AND CLM -1.7% -1.5% MAD RIO -1,0% 1.3% CAT Yo.Y. non-financial 1,4% expenses (%) EXT 1,5% MUR 2,7% TOTAL 5,3% ■Y.o. Y non-financial income (%) GAL 5,3% CAN CNT 5,7% 6.4% CVA PVA 8.4% 8.6% BAL CYL 10,1% 12,3% AST -0,1 0.0 0,1 24,8% 0,2 0,3 NAV 0,4 0.5 *Note: Data obtained from the budget execution of the Autonomous Regions as of January 2023. 24#25Autonomous Regional Financing System and additional transfers By 2023, the Autonomous Regions will receive an amount of 134,336 million euros: 124,292 million euros in State account transfers, plus 10,981 million euros from the positive liquidation of the 2021 financial year. These resources will enable the regions' budgetary situation to improve significantly, and as a result the reference rate for the Autonomous Regions in 2023 has been set up at -0.3% of GDP and in the absence of extraordinary transfers. State account transfers, 2019-23 (EUR mn) Extraordinary transfers in 202-2022 (€m) 2022 2019 Catalonia Galicia Andalusia 19.020 7.431 19.218 7.557 8.080 8.788 19.636 20.943 23.245 2020 2021 2022 2023 2023/2022 2023/2019 19.685 19.711 21.057 23.380 7.595 19.748 11,0% 22,9% 8,8% 18,3% 2017 VAT liquidation Estimated 2020 liquidation 2021 Extraordinary Fund 2020 Covid Fund Andalusia 11,0% 21,0% Aragon -537 -80 -1.261 2.358 2.199 -278 403 431 Asturias 2.740 2.794 Cantabria 1.805 1.845 1.842 1.987 2.761 2.924 3.216 2.159 10,0% 17,4% Asturias -86 -150 308 299 8,7% 19,6% Balearic -78 0 330 438 Canary Islands 0 0 629 551 La Rioja 971 998 992 1.071 1.165 8,8% 20,0% Cantabria -46 -146 168 177 Murcia 3.138 3.259 3.220 3.412 3.812 11,7% 21,5% Castile and Leon -182 -373 741 843 Valencia 9.433 9.788 9.731 10.270 11.653 13,5% 23,5% Castile La Mancha -130 -369 605 743 Catalonia -443 -538 2.161 3.171 Aragon 3.540 3.646 3.630 3.860 4.275 10,8% 20,8% Extremadura -86 -213 318 277 Castile-La Mancha 4.923 5.056 5.016 5.333 5.917 10,9% 20,2% Galicia -204 -392 828 735 Canary Islands 4.540 4.740 Extremadura 3.069 Balearic 1.980 Madrid Castile and Leon TOTAL 14.432 6.494 102.735 4.703 5.047 3.123 3.096 3.315 2.096 2.092 2.148 14.814 6.617 105.803 5.591 10,8% 23,1% Madrid -377 -496 1.864 3.346 Murcia -85 -86 422 389 3.613 9,0% 17,7% Rioja -20 -104 94 127 2.479 15,4% 25,2% Valencia -281 0 14.993 15.755 17.287 9,7% 19,8% Total -2.635 -4.407 1.400 12.629 1.486 15.212 6.542 6.936 7.635 105.523 112.138 124.215 10,1% 17,6% Excess announced -465 0 0 10,8% 9,2% Announced transfers* -3.100 -4.407 12.629 15.212 Source: Ministry of Finance * For 2022, the negative sign refers to the loss of the regional governments to be compensated by transfers. 25#26Regional deficit estimates for 2022 and 2023 The lower transfers received from the State in 2022 compared to the extraordinary funds approved in the previous year, will impact the public accounts of the Community of Madrid, with an expected deficit in line with the regional reference target of 0,6%, still significantly below the national average. Regarding 2023, the deficit forecast improves substantially due to the increased resources that will be transferred from the Regional Financing System. Deficit for 2021 and forecast for 2022 and 2023 (% GDP) Clousure 2021 AlReF CC.AA. 2021 2022 2023 Andalusia -0,2% -1,0% -0,1% Aragon -0,2% -0,6% 0,1% Asturias 0,9% -0,6% 0,4% Balearic 1,2% 0,0% 0,6% Canary 0,5% -0,6% 1,1% Cantabria 0,9% -0,5% 0,0% Castile and Leon -0,1% -0,9% 0,3% O Castile La Mancha 0,3% -1,4% -0,3% Catalonia 0,3% -1,3% -0,5% Extremadura 0,2% -1,1% 0,0% Galicia -0,2% -0,6% 0,4% Madrid 0,3% -0,7% 0,0% Murcia -1,4% -2,7% -1,4% Navarre 1,3% 0,6% 0,1% Basque Country 0,8% 0,4% 0,2% Rioja 0,03% -0,2% 0,1% Valencia -1,2% -2,6% -1,0% Regional Government -0,03% -1,0% -0,1% Source: Deficit of AIREF GDP % 26#27A flexible tax regime that drives competition and dynamism The Community of Madrid's policy on regional taxes aims at a flexible tax regime that favors the creation of companies and economic dynamism. Comunity of Madrid PIT Wealth tax Tax rate Only taxed over Tax rate Tax rate 18-45% 700.000 € Discount of 100% Catalonia 20-50% 7,65-34% 500.000 € 0,21-2,75% 7-32% Inheritance tax Bonuses Groups I and II: 99% Group I and II: 99- Group III: 10-15% 20% Inheritance and Gift tax Tax rate 7,65-34% Group I and II: 5-9% Andalusia Castile and Leon 19-47% 700.000 € 0,24-3,03% 7,65-26% Group I and II: 99% 7,65-26% 99% 7,65-34% 18,5-46% 700.000 € 0,2-2,5% 7,65-34% Group I and II: *Note: 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. Gift tax Group I and II: 99% Bonuses Group III: 25% Wealth Transfer Tax and Stamp Duty WTT SD Tax rate Tax rate 6% 0,75% 10-11% 1,50% 7% 1,20% 8-10% 1,50% Source: Tax Office. Tax actions 2021 / 2024: 1) Tax incentive to attract new foreign investors: 2) A half-point reduction in all regional personal income tax brackets. 3) Abolition of all taxes levied by the Community of Madrid. 4) Deflation of personal income tax. 5) Law on tax deductions to promote births, support for families and access to housing. 6) Allowance for inheritances between siblings, aunts, uncles and nephews of 25%. Features: Setting up a 20% deduction in personal tax liability on the investment made ( no minimum investment and is applicable to all types of assets). Minimum tax deduction of 6 years. Objectives: Boost savings and investment. Encourage new companies to set up, while helping those already operating to grow. Bolster Madrid's position as a benchmark for international investment to counteract the negative effects of the creation of the New Tax on Large Fortunes. 27 27#28The region of Madrid is the region with the highest tax competitiveness index (RTCI) ☐ The Regional Tax Competitiveness Index. (RTCI) makes it possible to evaluate, measure and compare the tax system of the different Autonomous Communities, with the aim of analysing the structure of the tax system in each one of them. ☐ The RTCI is a hierarchical index made up of five taxes (Income, Wealth, Inheritance, Inheritance, Transfer Tax and Stamp Duty, and the autonomous community taxes) that assesses specific indicators of each of these taxes. the In 2021 the most fiscally competitive Autonomous Community was Madrid with a value of 7,19, followed by the Basque Country and the Canary Islands. Catalonia in in last place with 4,63. Low Madrid 7,19 1° Regional Tax Competitiveness Index (RTCI 2021) Pais Vasco Álava 7,08 Guipúzcoa Vizcaya La Rioja 6,92 7,13 6,06 Asturias 5,17 16° Cantabria 5,93 11 3* 2º 8° Galicia 5,90 Navarra 5,71 14" 126 Castilla y Leon 6,33 Aragón 5,14 17" Cataluña 4,63 19° Score C.Valenciana 5,08 Extremadura 5,44 15" Castilla-La Mancha 5,99 10 18 Baleares 5,81 13" Andalucia 6,12 7* Murcia 6,02 9° Canarias 6,35 High Source: Foundation for the Advancement of Liberty. 28#29wwwww wwww wwww Economic strengths of the region The economic dynamism registered during the year 2021 continued during the first half of 2022, although with a slight slowdown in 2H22. Nevertheless, Madrid still has room for improvement in the economic recovery, especially in the services sector. Significant contribution of domestic demand to the region's growth, focused on household consumption and investment. Moderate inflation rate compared to other regions, allowing consumer purchasing power not to be excessively eroded, maintaining a positive outlook for successive quarters. Leadership in the creation of new companies. A diversified productive structure with a large presence of larger companies. The good relative performance of the labor market. Madrid has one of the highest percentages in higher education in Spain (40,8%). In addition, in 2022, 2.450.59 employment contracts were signed in Madrid, +2,7% more than in the previous year. In April-23, the Community of Madrid recorded its best-ever Social Security figures, with more than 3.5 million Social Security affiliates. Madrid is the most deregulated and lowest taxed economy in Spain and the most open to foreign trade and investment. 2023 YTD has evolved favorably in terms of the number of commercial companies created and in exports, both exceeding the levels reached in the same periods of previous years. 29 29#30wwwwww Community of Madrid: Key sectors • • Banking, insurance, and fintech 96.01% of Spanish foreign investment in financial services in 1Q- 20203Q (92.3% in 2020). 34.84% of those employed in the financial and insurance sector out of the national total work in Madrid in 3Q2022. Pharma & Biotech • • 12.73% of the turnover of the Spanish pharmaceutical sector in 2021. 44.5% of the turnover of the Spanish biotechnology sector in 2019. Aeronautical & Aerospace • • 93.92% of the turnover of the Spanish aerospace sector in 2020. Madrid concentrates 25% of the companies in the aeronautics and aerospace sector in the country. Content & Video Game Industry • 40% of the turnover of the Spanish content and video games sector in 2021. IT & Communications • 91.13% of the turnover of the Spanish communications sector in 2020. • 62.9% of the turnover of the Spanish ICT sector in 2020. www www. Startup Ecosystem • Madrid receives the European Innovative Region 2022 award at the Digital Enterprise Show. • • • According to the European Commission's Regional Innovation Scoreboard 2021 report, Madrid is one of the most innovative regions in Spain and Europe, concentrating 21% of this type of companies in the country. Logistics 70% of logistics companies operating in Spain are headquartered in Madrid in 2022. It has one of the largest logistics stocks in 2021, reaching 11,315,000 m2. Design and graphic arts • • Second region by number of companies in this sector (more than 3,700 - 21% of the total), behind only Catalonia (22%) in 2022. +11.86% of manufacturing affiliation in 2021-20. Higher Education • • The largest number of students in Spain (more than 350,655) in the academic year 2021/22 and one of the largest in Europe. 6 public and 12 private universities and some of the best business schools according to FT (ESCP Business School, IESE, IE). Sustainable mobility • • 35.2% of the electric vehicles registered in Spain in 2021 are in the Community of Madrid. 61% of work trips made in 2020 were made using sustainable modes. 30#31Competitive advantages Sector Weights breakdown of Spanish regions Services Wholesale & Retail commerce. Information & CCAA Farming Industry Construction hospitality. vehicle repairs. Communication activities Finance & Insurance activities Real Estate activities Scientific activities and auxiliary Technical & Public Administration. Defense. Social Art. Culture and Security. Entertainement. Total Services Education. activities. transport. services Healthcare and storage. Social Services Andalusia 8% 12% 7% 23% 2% 4% 13% 6% 22% 5% 74% Aragon 7% 21% 6% 21% 2% 4% 11% 6% 19% 4% 66% Asturias 1% 20% 7% 22% 2% 4% 13% 7% 19% 5% 72% Balearic 1% 6% 8% 37% 2% 3% 15% 9% 15% 5% 86% Canary Islands 2% 6% 6% 35% 2% 3% 13% 8% 20% 6% 86% Cantabria 2% 22% 7% 21% 2% 3% 14% 6% 19% 5% 70% Castile and Leon 4% 20% 7% 20% 2% 4% 11% 6% 22% 4% 70% Castile La Mancha 10% 19% 7% 19% 1% 3% 11% 4% 21% 5% 64% Catalonia 1% 19% 5% 25% 3% 4% 12% 10% 15% 5% 74% Comunitat Valenciana 2% 19% 7% 25% 2% 4% 13% 7% 17% 5% 72% Extremadura 10% 13% 7% 19% 1% 4% 11% 5% 26% 4% 70% Galicia 5% 18% 7% 23% 2% 3% 10% 7% 19% 4% 69% Community of Madrid 0% 10% 5% 24% 10% 6% 10% 15% 15% 5% 85% Murcia 6% 18% 6% 24% 1% 3% 10% 6% 20% 4% 69% Navarre 4% 30% 6% 19% 2% 3% 9% 7% 16% 4% 60% Basque Country 1% 24% 7% 21% 3% 3% 11% 8% 17% 5% 68% Rioja 7% 26% 6% 19% 2% 4% 10% 5% 17% 4% 61% Ceuta 0% 5% 5% 21% 1% 2% 10% 4% 47% 4% 89% Melilla 0% 4% 6% 19% 1% 2% 11% 5% 47% 4% 90% SPAIN 3% 16% 6% 24% 4% 4% 12% 9% 18% 5% 75% Higher exposure than the average to the service sector (85%) that has benefited from the post-pandemic recovery boost. Less weight than average in construction; a very labor intensive sector and very sensitive in terms of unemployment rates in recessions and stress scenarios. Leader among other regions in activities that will drive structural higher growth rates in the future such as: information, communications, finance, IT, scientific activities, etc 31#32www www Competitive advantages In 2022 (latest available data), the Community of Madrid recorded a competitiveness index higher than not only Spain but also some EU countries such as France, Italy and Portugal. It is also positioned as the most attractive Spanish region to live and work in, followed by the Basque Country and Catalonia. The Community of Madrid is the European region with the best public health indicators. Business sophistication Technological readiness. INNOVATION SUB- INDEX Market size EU Regional Competitiveness Index (2022) RCI 2.0 2022 Innovation BASIC SUB-INDEX Labour market 175 150 125 100 75 50 25 Institutions Macroeconomic 0 Infrastructure Higher education and LLL EFFICIENCY SUB- INDEX Basic education ES30: Comunidad de Madrid EU average Country average (ES) Source: European Comission. Health Index (EU27-100) <= 50.0 50.1 75.0 75.1 90.0 90.1 100.0 100.1 110.0 110.1 125.0 125.1 140.0 140.0 32 32#33CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid II. FUNDING PROFILE AND STRATEGY#34Normative 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. 34#35Debt ratios of the Comunidad de Madrid The Comunidad de Madrid has strong credit fundamentals, putting it in a very favourable starting position to face the current economic and health crisis. These debt ratios mean that the Community's cost of financing is very favourable. As a result, the Community has opted for greater financial autonomy (similar to the strategy of the Foral Regions), having repaid early in 2020 all the outstanding capital concentrated in the FFCA (unlike other regions where more than 80% of its debt is state-funded). 2023 1Q CCAA Debt (€ mill.) Debt/GDP (%) Evolution Debt / GDP (%) Comunidad Foral de Navarra 3.101.614 13.5 40 Comunidad de Madrid 37.495.462 14.2 País Vasco 11.428.397 14.2 35 Canarias 7.177.848 14.9 30 Principado de Asturias 4.212.285 16.0 25 La Rioja 1.652.155 17.0 Galicia 12.607.834 17.7 20 Andalucía 36.744.385 20.3 15 Castilla y León 13.271.513 20.3 10 Aragón 9.109.435 21.3 Cantabria 3.375.280 21.7 5 Extremadura 5.140.320 22.7 Illes Balears 8.919.174 26.1 Región de Murcia 11.505.800 31.7 dic 11 dic 12 dic 13 dic 14 dic 15 dic 16 dic 17 dic 18 dic 19 dic 20 Castilla-La Mancha 15.574.182 32.7 ⚫CCAA ⚫CYL CAT MAD -PVA Cataluña 85.456.190 33.1 Comunitat Valenciana 55.438.661 43.7 National Average 322.210.534 23.7 Source: Bank of Spain dic 21 dic 22 mar 23 35 55 23,7 20,3 14,2 33,1#36Gross Financing Needs 2023 2,680MM ⚫ Refinancing of long-term debt redemptions in 2023 55 MM • Negative settlement 120 monthly payments (DA 36th, Law 2/2012, 29 june) 802 MM ⚫Déficit 2023 (0.3 % Regional GDP) 1MM • Agencia Vivienda Social, (Lt) debt 205MM TOTAL FUNDING NEEDS 2023: 3,743 MM ⚫0.75% Déficit 2022 pending financing TOTAL ISSUED 2023: 3,490 MM (93.24% TOTAL NEEDS) 36#372023 Debt Strategy 1. Funding needs: EUR 3,7 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. 37#38Rating and debt ratios Moody's S&P DBRS FITCH Baa1 A A BBB+ Current Rating Outlook Date Stable 11 May 22 Stable Stable Stable 28 July 23 16 Jun 23 28 Apr 23 Comunidad de Madrid National Total 2020 2021 2022 2023 1Q 2020 2021 2022 2023 1Q Debt/GDP (%) 15.8 Debt 34,601 14.7 34,409 13.5 34,821 14.2 37,495 27.2 303,992 25.9 312,588 23.9 316,894 23.7 322,211 2020 Debt Average Cost (%) 1.91 1.86 2.09 Comunidad de Madrid 2021 2022 2023 1Q 2020 2021 Spanish Tresury 2022 2023 1Q 2.25 1.85 1.64 1.73 1.80 LCR (Liquidity Coverage Requirement): NIVEL 1 EUROCLEAR.ECB 0% risk weighted. Minimum risk applicable in accordance with European Prudential Regulations The average cost of Comunidad de Madrid is 2.31% (June 2023) Source: Comunidad de Madrid, INE and Bank of Spain Considering rights and obligations *Cost: Spanish Treasury 38 88#39The main characteristics of the debt Loans Distribution bonds/loans Type % Currency distribution Public entities Private entities 23.30% 76.70% Total % Loans 39.53 Bonds Bonds 60.47% Loans 39.53% Type Euro Foreign currency % 100.00 0.00 Euro 100% Total % Bonds 60.47 Distribution fixed/variable Fixed 88.62% Floating 11.38 A commitment to fixed-rate issuances is a strength: - Reducing risks. - Reducing volatility when making payments. Maturity Distribution Long term 99.46% Short term 0.54% Source: Comunidad de Madrid. (*) SEC 2010 Update: 31/12/2022 *Public entities: European and Spanish (ICO) Financial Institutions *Private entities, Private Banks 39 99#40Funding 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 2023 Bond ■Loans ■Sustainable Green Health Social Social Loan Madrid, regular player in Capital Markets. Source: Comunidad de Madrid Financing Needs 2023 40 40#41Maturities profile mill.€ 3.500 2.960 2.965 3.000 2.826 2.680 2.678 2.500 2.000 1.500 1.000 500 0 3.083 2.725 2.706 2.557 2.599 2.543 1.673 603 219 246 104 111 144 23 55 63 18 15 806 2.399 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 47-66 Bonds Loans Source: Comunidad de Madrid 41#42Average cost and life ge % 4,5 3,96 4 3,82 3,90 3,61 3,53 8,33 7,67 7,39 3,5 6,92 6,96 6,85 2,79 3 2,43 6,17 6,41 2,5 2,27 2,21 2,19 5,5 5,51 2 5,34 1,5 Years 8,38 8,39 8,5 8 7,5 7 6,5 6 2,09 1,91 1,86 5,5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Comunidad de Madrid Average Cost -Average Life The average maturity of debt is 7.85 years (June 2023) 5 222 42#43Comunidad de Madrid: Benchmark Transactions mill. € 2.000 1.800 1.600 1.400 1.200 1.000 800 600 400 200 31/10/29 0 17107123 21/05/24 30/09/24 30/04/25 30/04/27 Green Bond 30/04/27 30/04/28 30/07/28 31/10/28 Тар 30/04/29 12/03/30 30/04/30 30/04/31 30/04/32 30/04/33 ■Sustainable Common features of these operations: • Extraordinary investor's response. Outstanding quality of the orderbook: Demand driven by real money investors. High international support, very well diversified in geographical terms. Source: Comunidad de Madrid Public 25 43#44Deals Breakdown 2023 Amount Tenors Average Maturity Loans 2,143,000,000 8-13 10.39 Public Benchmark (Sustainable) 1,000,000,000 10.18 Public Benchmark (Green) 600,000,000 5.34 3,743,000,000 5-13 9.52 2022 Loans 2,174,000,000 5-30 11.17 Private Placements 100,000,000 20 20.00 Public Benchmark (Sustainable) 1,000,000,000 10.05 Public Benchmark (Green) 500,000,000 7.05 3,774,000,000 5-30 10.56 2021 Loans 751,000,000 10-13 11.62 Private Placements 380,000,000 28-40 31.45 Public Benchmark (Sustainable) 1,000,000,000 10.10 Public Benchmark (Green) 500,000,000 6.67 2,631,000,000 10-40 12.97 Source: Comunidad de Madrid 44 44#45€1bn 3.596% due 30th April 2033 BY REGIONS OTHER 5% SWITZERLAND 3% BENELUX 5% PORTUGAL 8% NORDICS 8% UK/IRELAND 8% ITALY 10% FRANCE 10% S • • 7° Sustainable Public Deal GERMANY 26% SPAIN 17% BY INVESTOR TYPE OTHERS 2% BC & 10 13% BANKS 15% INSURANCE COMPANIES AND PENSION FUNDS 25% TOTAL AMOUNT 1,000,000,000 € First public benchmark issued by Comunidad de Madrid in 2023. 83% placed outside Spain. Order book 6.2 billion euros with more than 160 accounts. ASSET MANAGERS 45% 45 45#46€600 bn 3.362% due 31 October 2028 BY REGIONS SWITZERLAND 3% BENELUX 3% OTHERS 3% FRANCE 5% ITALY 6% PORTUGAL 7% UK/IRELAND 7% • • GERMANY 10% NORDICS 13% 4° Green Public Deal BC & IO 14% SPAIN 43% BANKS 16% TOTAL AMOUNT 600,000,000 € BY INVESTOR TYPE OTHERS 7% INSURANCE COMPANIES AND PENSION FUNDS 25% ASSET MANAGERS 38% The transaction is the fourth green bond since 2020 Strong interest from investors (final orderbook 2bn from 78 investors) International demand took around 57% of transaction This transaction is one of the few in Europe to be fully aligned with the EU Green Taxonomy, and consolidates Madrid's leading position as ESG bond issuer. Source: Comunidad de Madrid 46#47• 2023 Notes Issuance Program Operations Operation Amount € mill Settlement Date Maturity Date Notes 13,200,000 5/4/2023 11/10/2023 Notes 20,000,000 7/13/2023 9/13/2023 Notes 20,000,000 8/7/2023 10/6/2023 Total 53,200,000 The Note Issuance Program amounts to €1 bn. The nominal issue in 2023 is €325.2 million The outstanding amount of the Note Issuance Program is €946.8 million. Source: Comunidad de Madrid 47#48€1bn 1.723% due 30th April 2032 BY REGIONS OTHER 6% SWITZERLAND 6% NORDICS 3% ITALY 7% BENELUX 17% UK/IRELAND 8% FRANCE 11% 6° Sustainable Public Deal SPAIN 27% GERMANY/AUSTRIA 15% BANKS 39% 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 BY INVESTOR TYPE OFFICIAL INSTITUTIONS 2% ASSET MANAGERS 39% INSURANCE COMPANIES AND PENSION FUNDS 20% 48#49€500 bn 2.822% due 31 October 2029 BY REGIONS PORTUGAL 2% OTHER 4% SWITHERLAND 1% BENELUX 9% ITALY 14% 3º Green Public Deal SPAIN 23% UK/IRELAND 16% FRANCE 17% GERMANY/AUSTRIA 14% BY INVESTOR TYPE INSURANCE COMPANIES AND PENSION FUNDS 4% BANKS 33% OTHERS 16% ASSET MANAGERS 47% • Third public green benchmark for Comunidad de Madrid. • 77% placed outside Spain. • 51% ESG investors. This transaction is one of the few in Europe to be fully aligned with the EU Green Taxonomy, and consolidates Madrid's leading position as ESG bond issuer. Source: Comunidad de Madrid 49 49#502022 Bond Profile BY REGIONS OTHER 5% PORTUGAL 1% SWITZERLAND 4% NORDICS 2% ITALY 15% BOND TRANSACTIONS BY INVESTOR TYPE OFFICIAL OTHERS 2% INSTITUTIONS 2% SPAIN 24% BANKS 35% GERMANY/AUSTRIA 14% BENELUX 13% UK/IRELAND 10% FRANCE 12% Source: Comunidad de Madrid AMOUNT ISSUED 1,600,000,000 € ASSET MANAGERS 35% INSURANCE COMPANIES AND PENSION FUNDS 27% 50 50#51CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid III. SUSTAINABLE FINANCE 2023 & IMPACT REPORT 2022#52Sustainability Mandate of the Community of Madrid Comunidad de Madrid has a clear social and environmental mandate to meet the needs of its citizens. Fostering inclusive growth is core for the Region, and so it is committed to integrate sustainable development and social responsibility in all its activities while playing a key role to promote sustainable initiatives on the territory. Social expenditures include several programs such as the financing of public polices related to public health, education, social services, employment promotion, public transportation, and subsidized housing. Comunidad de Madrid's expenditure on social programs aim to strengthen Madrid's socio-economic recovery and improve social cohesion, thanks to the development of public services that benefit all the citizens and the implementation of programs to promote employment through investment of small businesses. Strategy for Social Inclusion 2016/2021, within the framework of the Europe 2020 Strategy, which seeks to eradicate severe poverty from the region Comunidad de Madrid 2022 - Sustainability Strategy Highlights € 1.26 Bn Social Inclusion Projects Li 172 families Affordable Housing € 531 Mm 63,000+ patients High impact medicines for rare diseases Source: Comunidad de Madrid 52 62#53Sustainability Mandate of the Community of Madrid Comunidad de Madrid has an important environmental mandate. Almost 50% of the region area is protected due to its environmental protection and conservation value. The geo-economic situation in Madrid creates the need to implement policies for pollution management and waste treatment in densely populated urban areas. Guided by this purpose, the region set out its Strategy for Sustainable Waste Management for the 2017-2024 period. In relation with climate change and air quality, the Plan Azul+ 2013-2020 has been the backbone for eight years, particularly focusing in tackling pollution and promoting energy efficiency. Among the measures set out in the Plan Azul+, which is expected to be followed by a new Plan from 2021, we find the following objectives by sector, which are representative of the regions' general sustainable strategy: • . . • Transportation: Metro de Madrid is Spain's largest and Europe's third largest (third to London and Moscow) metro system with 302 stations spread over 294 Km. Comunidad de Madrid aims to modernise taxi and bus fleets with greener vehicles, improvement of bicycle infrastructure, fiscal incentives for the transition towards greener technologies in private transportation Industry: reduction of emissions from industrial activities, like NOX produced by cogeneration plants Residential/commercial/institutional: use of clean fuels for domestic heating, improvements in energy efficiency, smart grids Agriculture: sustainable management of forests, promotion and development of biomass energy 2021 - Emissions 370,024 Avoided by tCO2 Green Public R-2823 國 Transportation Source: Comunidad de Madrid 53 33#54Contribution to the UN SDGs Comunidad de Madrid is committed to the implementation of the 2030 Agenda for Sustainable Development. In order to implement concrete actions, the project "Madrid is Action" has been established SUSTAINABLE GOALS DEVELOPMENT 17 GOALS TO TRANSFORM OUR WORLD WE SUPPORT 1 POVERTY GOOD HEALTH AND WELL-BEING W Affordable Housing (Target 1.4) Social Inclusion (Target 1.1 and 1.B) Healthcare (Target 3.8) Comunidad de Madrid THE GLOBAL GOALS For Sustainable Development SUSTAINABLE DEVELOPMENT GOALS (11) B Source: Comunidad de Madrid W 5 QUALITY EDUCATION GENDER EQUALITY DECENT WORK AND ECONOMIC GROWTH SUSTAINABLE CITIES AND COMMUNITIES CLINATE 13 ACTION Education (Target 4.1, 4.2, 4.4, 4.A) Social Inclusion - Fight against gender violence and promotion of equal opportunities (Target 5.1 & 5.2) Social Inclusion (8.6) SMEs financing (8.3, 8.6) Affordable Housing (11.1) Clean and Sustainable Transportation (11.2) Climate Change Policies (13.2, 13.3) LIFE ON LAND Environmental conservation and biodiversity (15.1, 15.2) 54 54#55Rationale for Sustainable Financing Community of Madrid' Sustainability Mandate Addressing the social and environmental transition Supporting the growth of a sustainable financial market Comunidad de Madrid devotes a substantial portion of its budget to social and environmental spending Via the issuance of sustainable debt, Community of Madrid contributes to its social and environmental policies and actions Alignment of the funding strategy with the sustainability strategy By issuing Sustainable Finance Instruments, Community of Madrid contributes to global, EU and national social and environmental objectives Contribution to the achievement of UN Sustainable Development Goals (SDGs) Achievement of sustainable growth for Community of Madrid's citizens Address the increasing demand for more sustainable assets by responsible investors Diversify its investor base targeting SRI and dark green investors, while fostering the relationship with existing investors Contribution to the development of a sustainable financial market Comunidad de Madrid believes that Sustainable Finance Instruments are effective tools to channel investments to projects demonstrating climate and social benefits 55 55#56Sustainable Finance Framework Alignment with the Standards The Sustainable Finance Framework of the Community of Madrid complies with: • ICMA Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines LMA Green Loan Principles ICMA 3 Use of Proceeds Project Evaluation and Selection Management of Proceeds Community of Madrid Framework's pillars • • Sustainable Finance Instruments' proceeds will be allocated to eligible expenditures with a clear social and/or environmental benefit within the General Budget Carried out by the Committee of Selection, Monitoring and Evaluation that meets before the issuance of a Sustainable Finance Instrument, in accordance with the Eligibility and the Exclusionary Criteria Sustainable Finance Instruments' proceeds will be managed in a portfolio approach The The Green Bond Principles Social Bond Principles 4 Reporting Loan Market The Sustainability Bond Guidelines Association Green Loan Principles 5 the authoritative voice Supporting environmentally sustainable economic activity of the EMEA market External Review Allocation and Impact reporting provided annually until full allocation of the Sustainable Finance Instruments' proceeds Second Party Opinion (SPO) from Sustainalytics. Community of Madrid might hire an external party to audit the allocation of proceeds Under the Green Finance Framework, Community of Madrid can issue Sustainable Finance Instruments which include Green, Social, Sustainability bonds, private placements and loans Source: Comunidad de Madrid 56 56#57Second Party Opinion by Sustainalytics¹ Use of Proceeds By financing social housing, CdM directly supports Spain's State Housing Plan Comunidad de Madrid's finances public education for all, and allocates resources to guarantee access to education for students in disadvantaged situations The financing of the healthcare programme will facilitate the ongoing provision of quality healthcare services to the local population Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies The support provided to Madrid's SMEs, will strengthen the competitiveness of SMEs and leading to the creation and preservation of jobs, and promote the integration of vulnerable people Financing low carbon transportation and reduction of global CO2 emissions are considered an impactful use of proceeds Project Evaluation and Selection In line with market practice Management of Proceeds In line with market practice Reporting In line with market practice ☑ ☑ SUSTAINALYTICS Second-Party Opinion Comunidad de Madrid Sustainable Finance Framework Evaluation Summary Sustainalytics of the opinion that the Comunidad de Madrid Sustainable Finance Framework aligns with the Green Bond Principles 2018 Green Loan Principles 2018 Social Bond Principles 2018 and the Sustainability Bond Guidelines 2018. This assessment is based on the folowing USE OF PROCEEDS The sixeligible categories for the use of proceeds (Affordable Housing ) Education; (i) Healthcare; (v) Social Inclusion; Economic Inclusion and SME Financing: () Climate Change and Environmental Management are aligned with those recognized by both the Green Bond Principles and the Social Bond Principles. Sustanalytics considers the digible categories outlined in the Comunidad de Madrid Sustainable Finance Framework to have clear social and environmental benefits with specific relevance to UN Sustainable Development Goals 1, 3.4.5 8. 11,13 and 15 PROJECT EVALUTION / SELECTION Bigible programmes are evaluated and selected by a dedicated internal Selection Monitoring and Evaluation Commitee The Commmee is composed of representatives from the Regional Treasury Department and sub- departments for Financial Planning and Public Finance and it will meet prior to the issuance of a sustainable finance instrument to select eligible programmes from the General Budget. Sustaina considers the project evaluation end selection process of Comunidad de Madrid to be in line with market practice MANAGEMENT OF PROCEEDS In line with market practice, the proceeds of the Sustainable Finance Framework will be allocated to eligible budgetary programmes in the General Budget of Comunidad de Madrid, comesponding to the fiscal year of the lasuance and/or to the fiscal year preceding the year of the issuance. In case full allocation at issuance is not possible, the unallocated proceeds will be held and/or invested in Comunidad de Madrid's liquidity portfolio. pending full allocation REPORTING Comunidad de Madrid intends to report on the allocation of proceeds on its website within approximately one year from the cats of issuance and until the proceeds have bean fully allocated Allocation reporting will include the total amount provided to the various eligible budgetary programmes. Where feasible, the impact report will include relevant impact indicators per each green and accial eligible category. Sustainalytics views Comunidad de Madrid's allocation and impact reporting as aligned with market practice © 2020 SUSTAINALYTICS SECOND- PARTY OPINION Evaluation date Issuer Location March 27, 2020 Madrid Spain Report Sections Introduction 2 Sustainalytics Opinion. Accendices 3 11 For inquires contact the Sustainable Finance Solutions project team Evan Bruner (Arnsterdam) Project Manager even [email protected] (+31) 20 205 0027 Jean-Claude Berthelot (Amsterdam) Client Relations jean claude [email protected] (+31) 20 205 00 15 Sustainalytics is of the opinion that the Comunidad de Madrid Sustainable Finance Framework is credible and impactful, and aligns with the Green and Social Bond Principles and Green Loan Principles 2018 Source Comunidad de Madrid 1The full Second Party Opinion is available at: http://www.comunidad.madrid/inversion/relacion-inversores/deuda-sostenible 57 57#582023 Eligible Portfolio – Budgetary Programs - AFFORDABLE HOUSING ECONOMIC INCLUSION AND SME FINANCING €9.59MM 0.27% CLIMATE CHANGE AND ENVIRONMENT MANAGEMENT €711.49MM 26.77% €42.01MM 1.58% SOCIAL INCLUSION €1261.73MM 47.48% AMOUNT OF THE RESPONSIBLE BUDGET € 2,657.63 million EDUCATION €103.54MM 3.9% HEALTHCARE €531.74MM 20% 58 58#592023 Eligible Portfolio – Budgetary Programs Eligible categories Program Description Affordable Housing Provision of affordable housing and shelter to disadvantaged populations Education Healthcare Program in the General Budget 261B Amount in € million (2023) UN SDGs FOVERTY SUSTAINABLE CITIES 11 AND COMMUNITIES 42.01 • Provision of education to the youth (including disadvantaged groups) and support of public schools and universities QUALITY 232A/322A, B, C, F/ 4 EDUCATION 103.54 323M / 324M • Support to Madrid's Public Healthcare System and financing of high impact medicines against rare diseases • Social Inclusion • Economic Inclusion and SME Financing Climate Change and Environmental Management Source: Comunidad de Madrid • • • 312A, 313B 531.74 Fight against gender violence and promotion of equal opportunities Integration, education and employment programmes and financial assistance to vulnerable groups at risk of social exclusion Universal accessibility to the public transportation system (reduced price ticked) Provision of goods and services to the elderly and the mentally and/or physically disabled SMEs financing Employment promotion and advancement, 231A,B,C,D,E,F, I/ 232A, B, E/241A, M/ 261B/322A,B,F/ 323M / 324 M / 422B/ 431A/ 433A/ 453N / 463A/ 1,261.73 463A / 466A 7.12 including people with distance to labour market 3 GOOD HEALTH AND WELL-BEING W POVERTY GENDER EQUALITY 4 QUALITY EDUCATION DECENT WORK AND 8 ECONOMIC GROWTH CLIMATE 13 ACTION • Environmental conservation and biodiversity 422B453N / 456A,N 711.49 59 59#60Reporting Framework example: Sustainability Bond Allocation Reporting 2022 3000 2500 2000 1500 1000 500 0 Eligible Expenditure Total Value of Eligible Projects EUR 2,657.63Mm Vs Sustainable Finance EUR 1.35Bn ■Affordable Housing ■ Education ■ Healthcare Sustainability Funding ■Social Inclusion Economic Inclusion and SME Financing ■Climate change and Environment Management % of Eligible Sustainable Project Portfolio allocated: 50.8% Source: Comunidad de Madrid % Sustainable net proceeds allocated: 100% 60 60#612022 Sustainability Bond Impact KPIs Project category Target population Target Group Eligible Project Category SDG Addressed Budgetted amount (if applicable) Allocation information Impact indicators Share of Allocated to sustainable bond (amount) Total Number of beneficiaries Other impact indicators Budget Financing MEUR % Number Unit of measure Affordable Housing Goal 1: No Poverty Goal 11: Sustainable Cities and Communities Disadvantaged and underserved groups 42,010,166.28 42,010,166.28 3.1% 172 Families with social housing Education Goal 4: Quality education Youth. disadvantaged groups 103,540,691.36 103,540,691.36 7.7% 479,692 Number of vulnerable students Additional Indicators Number of families assited by ASIVECAM Number of families reallocated Number of social housing units acquired Number of students with academic reinforcement Number of scholarships professional training higher degree Number of public schools (0-18 years) number / unit of measure 21,445 76 35 27,045 8,686 1,450 Number of people with a rare disease Goal 3: Good Healthcare Citizens (including Health and Well-disadvantaged and underserved being groups Number of people 531,740,684.35 529,690,684.69 39.2% 431 treatment medication 62,495 high impact Social inclusion Goal 1: No Poverty SDG 5: Gender equality Disadvantaged and underserved groups 1,261,728,454.33 666,567,129.21 49.4% 1,912,385 Economic inclusion Environmental management Total Goal 4: Quality education Goal 8: Decent work and economic growth Goal 13: Climate Action being provided access to services and adequate medication Number of individuals or families benefiting from social benefits Number of individuals or families benefiting of social minimum income Number of victims of gender violence supported Number of subsidized trips Number of SMEs and long-term unemployed SMEs that 7,121,473.41 7,121,473.41 0.5% 112 received support 711,491,790.05 1,069,855.05 0.1% 2,657,633,259.78 1,350,000,000.00 100.0% 2,392,792 6,694 families 19,992 117 Number of annual data for air quality parameters 1,392,801 Number of annual data meteorological parameters 1,464,484 61#62Selected Projects for the 2023 Sustainability Bond Comunidad de Madrid has a clear social and environmental mandate to meet the needs of its citizens, Sustainable development is at the centre of our policies for strong. sustainable and inclusive growth and development, SELECTED PROJECTS ELEGIBLE CATEGORY PROJECT NAME Affordable Housing Eviction of Cañada Real and Guadarrama River. Acquisition of housing. Maintenance and conservation of inhabited social housing. Development of land for the construction of social housing. Construction of new social housing developments. AMOUNT 737.000,00 3.670.347,45 6.489.478,74 28.283.348,70 Repair of uninhabited social housing for their second allocation. Neighbourhood Assistance Service of the Community of Madrid. A SIVECAM. Attention to students with specific educational support needs. Book lending programme. ACCEDE Programme. Maintenance of Secondary Education Centres. 1.167.938,29 1.662.057,10 2.551.809,50 Education Refuerza Programme (academic support and reinforcement activity)- Training and awareness-raising for women in situations of sociall exclusion. Scholarships for advanced vocational training. 53.444.283,48 22.536.731,00 2.343.000,00 Educational compensation classrooms. Shola hips for public universities 0,00 18.958.248.70 706.618,88 3.000.000,00 529.000.000,00 Healthcare Social Inclusion High-impact medicines and orphan drugs. Collaboration with Local sector Collaboration with professional bodies. Collaboration with citizens' organisations. Mobile Support Service for Drug Dependency Grants for School meals Economic benefits in situations of dependency. Domiciliary care in situations of dependency. Care services for seniors in specific centres Subsidies for public transport users. Care for the elderly in centres. Care services in residential centres for women victims of gender violence. Social canteens services Care services in non-residential centres for women victims of gender violence. Economic assistance for the social integration of women victims of gender violence. Free school transport service for pupils in special education centres. Free transport service for students with physical disabilities. Free school meals for pupils in special education centres Free school transport service for pupils in shantytowns. Participation and integration centres (CEPI). Volunteer school. Housing First Programme. Care centre for people in situations of social exclusion. 87.244.80 103.440.00 499.999,83 2.049.999,66 29.229.333.97 288.654.720,00 89.300.931,77 333.643.202.50 467.987.407.00 13.359.295.00 599.189.90 3.021.344,00 4.531.869,56 63.800,00 6.587.229.43 7.364.565,94 2.835.095.18 978.577.00 2.371,418,40 119.452,00 527.727,40 1.690.680,00 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). Grants for LGBT NGOs. Development Cooperation Subsidies. Aid for the promotion of technological sectors Consortia Subsidies for the promotion of technological sectors. Start-ups Economic Inclusion and SME Financing Aid for the use of innovation services in SMEs Innovation vouchers. Aid for industrial SMEs Industry 4.0 projects. Aid to Innovation Intermediary Entities. Natural Protected Areas. Measures to protect and improve the environment. Environmental education. Conservation and maintenance of peri-urban parks. Climate Change and Environment Management Subsidies for non-profit entities with environmental purposes. Subsidy for the user of public transport (Clean Transport). Action Plan on Listed Wetlands. Source: Comunidad de Madrid TOTAL Recovery and improvement of forest lands. Maintenance and support for the management of the air quality network. 75.812.90 210.357.77 19.344.249,10 4.500.555.41 550.000,00 4.177.840,00 2.497.497,97 730.252,04 748.416,00 2.471.761,59 875.545.81 4.187.972.00 1.614.179,00 3.214.000.00 500.000,00 700.000.000.00 151.434,00 754.350,00 1.089.855,05 2.657.633.259,78 62 62#63CASE STUDY for HEALTHCARE High Impact Medicines and Orphan Drugs Mobile Support Service for Drug Dependency diferentes iguales Enfermedades distintas, personas iguales Plan de mejora de la atención sanitaria a personas con enfermedades poco frecuentes de la Comunidad de Madri 2016-2020 Comunidad de Madrid offers universal healthcare coverage to all of its citizens. The overall objective of the healthcare programme is the maintenance of a quality healthcare service and an efficient use of resources. Madrid's public healthcare service includes plans such as the "Plan to improve healthcare services for people with rare diseases". Providing integrated and comprehensive care by all the agents involved is essential to improve the daily life of these people and their families. Within the Plan to Improve Healthcare for People with Rare Diseases, Comunidad de Madrid financed EUR 529mm for rare diseases treatments, close to 63,000 patients were treated: 431 patients which annual costs is over EUR100,000 852 patients with Chronic Hepatitis C 31 CAR-T therapy treatments. 8,585 multiple sclerosis 25,930 immune-mediated inflammatory diseases patients 25,892 HIV patients 763 Pulmonary hypertension αμός 8 Comunidad de Madrid provides healthcare to about 3300 drug addicts out of treatment through mobile devices in marginal areas. This project aims to minimize the negative effects related to consumption and contributes to public health by controlling and monitoring transmitted diseases, providing referrals to drug addiction treatment, counselling and support services network Source: Comunidad de Madrid Proceeds of the bond will be allocated to projects aimed at providing a modern and sustainable public healthcare service system to the citizens of Madrid (including, but not limited to, vulnerable groups) 83 63#64CASE STUDY for EDUCATION ACCEDE - Book lending program Education Centers Maintenance Programa ACCEDE } REFUERZA-Academic Support Accede Program textbook lending program for eligible students of Primary Education, Compulsory Secondary Education and Basic Vocational Training Close to 480,000 students from nearly 1,500 schools benefited from this program Comunidad de Madrid has allocated EUR53,4Mm to this program Comunidad de Madrid offers a wide network of public primary and secondary education schools and special education schools Every year, Comunidad de Madrid builds new centers to cope with takes care of the maintenance of schools, by taking preventive, diagnostic, updating, replacement, and repair procedures. In 2022 more than 370 schools benefited from these procedures The Academic Support program seeks to complement Primary Schools training by offering students reinforcement activities, study techniques or knowledge expansion sessions. About 15,000 students benefited form this program. 72% of students saw their grades and performance improve Education is a fundamental social right, bringing significant benefits to society. An educated and skilled workforce is essential for our region's competitiveness. Source: Comunidad de Madrid 14 64#65CASE STUDY for AFFORDABLE HOUSING • ° Uninhabited Social Houses Refurbishment Cañada Real & La Sabinas - Rehousing ASIVECAM Neighborhood Assistance Comunidad de Madrid dedicated close to EUR 1,200Mm to Social Housing projects. Among others those dedicated to the maintenance and conservation of inhabited social housing to improve the safety and the accessibility and enhance its energy efficiency 314 vacant social homes were refurbish Comunidad de Madrid repaired 54 homes and rehoused 76 families from the dismantling of the Cañada Real and Las Sabinas shanty towns, investing 737.000€ Social housing plays a vital role in meeting the housing needs of people across Comunidad de Madrid This project is part of a global plan aiming eliminate the last shanty towns in the region by providing safe, secured and long term accommodation to disadvantaged population. Comunidad de Madrid is also committed to cleaning and restoring the riverbanks improving the environment ASIVECAM- the Comunidad de Madrid Neighborhood Assistance service Aims to favor and activate processes of coexistence and communication, to provide answers to the problems raised in the promotions of public housing of the Social Housing Agency, which facilitate the integration of people and the development of these, through their participation. Comunidad de Madrid is committed to tackle inequalities and provide access to affordable and quality housing. Social housing plays a vital role in meeting the housing needs of people across Comunidad de Madrid Source: Comunidad de Madrid 95 65#66CASE STUDY for SOCIAL INCLUSION Minimum Insertion Income (RMI) M MM H Assistance for Women victims of gender violence Domiciliary Care for Seniors Minimum Insertion Income (RMI) refers to the different programs aimed at individuals and families who lack sufficient economic resources to cover their basic needs, accompanied by a process of social intervention. In 2022, 5.355 persons received the RMI in the Comunidad de Madrid. Comunidad de Madrid earmarked EUR152,5Mm for this purpose Comunidad de Madrid funds a broad range of initiatives and programs aiming to end all forms of gender-based violence In 2022, 436 women and 279 children were treated in Shelter Centers specialized in offering women and their dependents a comprehensive recovery treatment that from the psychological, educational, socio- labour and legal fields, favors the normalization of the family unit. Day Centers supported more than 2,000 women and 89 children Comunidad de Madrid provided home assistance to more than 60,500 dependent persons. The care services aim to promote personal autonomy, as well as meeting the needs of people with difficulties in performing basic activities of daily living. Comunidad de Madrid's strategy for social inclusion aims to achieve the full integration in society of people who are in a situation (or at risk) of poverty and social exclusion, fighting against gender violence and promoting equal opportunities Source: Comunidad de Madrid 66 99#67CASE STUDY for SME FINANCING Industry 4.0 projects APRIM Case Study Ayudas Pymes Industria 4.0 aprim alta precisión industrial mecánica Comunidad de Madrid Dirección General de Economía y Competitividad CONSEJERÍA DE ECONOMÍA, EMPLEO Y COMPETITIVIDAD SMEs play a major role in Comunidad de Madrid's economy. Supporting SMEs is a priority for the regional goverment, as well as providing these companies with the necessary tools to adapt to current market needs and expand their businesses Under the Industry 4.0 program, Comunidad de Madrid provided in 2022 assistance and funding to 59 Industrial SMES for the development and implementation of innovative proyects APRIM was established in 1965 with a basic activity focused on the manufacture and mechanization of parts and assemblies destined for the Automotive and Transport Industry. APRIM has evolved to offer a wide diversification of services including the manufacture of kits and assembly of sets with components not only mechanical, but also pneumatic, electrical, electronic, etc On May 19, 2022, the Ministry of Economy, Finance and Employment of Comunidad de Madrid provided the industrial company APRIM with EUR131,981.20 grant to implement innovative solutions for the automation of its production lines and digitization of the company. These projects and investments are link to: Open/Linked/Big data and Data analytics Installation of turning lathe • Installation of double head lathe All Sma 12:46 3 Robots Digitising industries is one of the key challenges to be tackled for fostering growth. Comunidad de Madrid is committed in supporting SMEs in all stages of their life cycle to develop and achieve growth and engage in innovation Source: Comunidad de Madrid 10 67#68Leadership in Sustainable Bonds • • • First Spanish Region to issue Sustainable Bonds. • Largest number of Sustainable Bonds issued in Spain. . Ability to Issue Green, Social and Sustainable Bonds and Loans. · 7 Sustainable benchmark size public bond issued since 2017. 47% of the total Comunidad de Madrid's annual issuance in 2022 were sustainable bonds. • Largest amount outstanding in Sustainable Bonds (7,803 MM). Transparent and public reporting on projects financed under the framework. Amount Settlement Tenor (€ million) Sustainable Bond (Public) 1,000 02/23/2018 10 Sustainable Bond (Public) 1,250 02/14/2019 10 Sustainable Bond (Public) 1,250 02/27/2020 10 Green Bond 700 05/08/2020 7 Sustainable Bond (Public) 1,000 03/26/2021 10 Green Bond 500 11/26/2021 7 Sustainable Bond (Public) 1,000 04/11/2022 10 Green Bond 500 10/14/2022 7 Sustainable Bond (Public) 1,000 02/24/2023 10 Green Bond 600 06/29/2023 5 Source: Comunidad de Madrid 68 898#69CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid 2023 GREEN FINANCE ALLOCATION & IMPACT REPORTING 2022#70Sustainability Mandate of the Community of Madrid 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. Guided by this purpose, the region set out its Strategy for Sustainable Waste Management for the 2017-2024 period. In relation with climate change and air quality, the Plan Azul+ 2013-2020 has been the backbone for eight years, particularly focusing in tackling pollution and promoting energy efficiency. Among the measures set out in the Plan Azul+, which is expected to be followed by a new Plan, we find the following objectives by sector, which are representative of the regions' general sustainable strategy: . . • Transportation: Metro de Madrid is Spain's largest and Europe's third largest (third to London and Moscow) metro system with 302 stations spread over 294 Km. Comunidad de Madrid aims to modernise taxi and bus fleets with greener vehicles, improvement of bicycle infrastructure, fiscal incentives for the transition towards greener technologies in private transportation Industry: reduction of emissions from industrial activities, like NOX produced by cogeneration plants Residential/commercial/institutional: use of clean fuels for domestic heating, improvements in energy efficiency, smart grids Agriculture: sustainable management of forests, promotion and development of biomass energy Source: Comunidad de Madrid R-2823 2022 Emissions 600,825 Avoided by tCO2 Green Public Transportation 70#71Green Expenditures for the 2022 Green Bond issuance Clean Transportation ENT EMT MADRID 135 Irizar © 2569 LCD • Comunidad de Madrid supports the decarbonization of the Region's public transport In 2022, EMT Madrid has approved a €35m investment for the purchase of 50 new electric buses and 6 electric micro-buses This is in line with the company' strategy of gradually reducing the fleet's carbon emissions Comunidad de Madrid supports the maintenance and development of the fully-electrified Madrid's metro Thanks to the Energy Saving Plan 2012-2017 and the current Energy Efficiency Plan, Metro de Madrid ― the public enterprise of the Madrid underground - has reduced electricity consumption in daily operations by 25% Comunidad de Madrid was the first Public Sector issuer in Spain to align its Green bonds with the EU taxonomy and standards Source: Comunidad de Madrid 71#72Other Environmental initiatives encouraged by CAM Project and supply works and turnkey assembly for a plant of green hydrogen production or distribution network modernization among others • Comunidad de Madrid is supporting economically several projects outside their green bond offerings. Through Canal de Isabel II (CYII), for instance, Comunidad de Madrid is carrying out the assembly of a plant for green hydrogen production. Including the operation of the facility for two years and the commercialization of H₂ produced. ⚫ In 2022, a 1MW photovoltaic power plant has been built in the same wastewater station, being the first phase of the project. With a production capacity of 200Nm³/h green hydrogen. • • ° • Canal de Isabel II is a fully publicly managed water company, the shareholding is made up of the Community of Madrid (82.4%) and 111 municipalities of the Community (17.6%). Through CYII, main competence is to supply and purify the water of most of the municipalities in the region. For the next year Comunidad de Madrid will support finance of over Eur 300M to CYII for RED Plan: Distribution Network Modernization with the aim to improve resiliency and modernization actions in the water distribution network of Madrid region. Canal de Isabel II are managers of a natural resource and is entrusted with the mission to protect the quality of bodies of water in the Madrid region. The preservation of the environment and the sustainable management of all their activities are part of the their DNA. Its main objective is to promote the circular economy and sustainable development, addressing the challenges associated with climate change through the corresponding adaptation and mitigation plans of Comunidad de Madrid. Source: Comunidad de Madrid, Canal de Isabel II 72#73Other Environmental initiatives encouraged by CAM Biofactories: Obtaining raw material from wastewater treatment Hydraulic and biogas microturbines Photovoltaic solar panels Hydroelectric mini plants Thermal drying of sludge Gas stations 11111 Canal Isabel II annually produces more than 120 hm3 of reclaimed water, using it to irrigate green areas, wash streets and industrial uses. In addition, They understand wastewater treatment plants as biofactories in which Canal de Isabel II takes advantage of biogas to produce electricity and vehicle fuel, they sanitize sludge for reuse as fertilizers and recover phosphorus from wastewater to produce 1,5 tons of struvite daily. Facilities under Canal de Isabel II: 9 Hydroelectric power plants 13 Treatment plants equipped with motor generators that work from the biogas generated in the treatment 2 Cogeneration plants associated with thermal drying of sludge 3 Small wastewater jumps that take advantage of the difference in elevation at the discharge point 9 Microturbines installed at different points of the supply network 2 Purification stations that have several photovoltaic panels Thanks to the joint performance of these facilities, last year Canal de Isabel II broke their historical record for electricity generated. In total 420 million kilowatts hour, equivalent to 87 % of their total consumption. Moreover they broke their historical record for the percentage of energy production over consumption (125 %). Source: Comunidad de Madrid, Canal de Isabel II 73#74Other Environmental initiatives encouraged by CAM BI Arroyofresno a Lacoma Herrer Begoña Centro de ustración Peñagranda Barrio Chamartin 8 0800 Valdesceders Tetuan/ Cusco Ambitious investments in subway line extensions and bus interchanges & terminals GRANDES ACTUACIONES DE MADD 2019/2030 DIRECCIÓN GENERAL DE INFRAESTRUCTURAS DE TRANSPORTE COLECTIVO Valdezarza Francos Rodriguese Las Tablas Palas de Rey Fuencarral Norte R 4 Fuencarral Negocios Chamartinambu VideCiudad de Santa Mansued de la Justicia la Justicia 100 Canilles PARACUELLOS DE JARAMA Maria Tudor Valdebebas Norte Aeropuerto T4 Virgen Alvarez de Vilaamil Aeropuerta Aeropuerto det Contijo de la Mora Internacional Madrid-Barajas A B1 Pinar de Hortaleza D Dugue de Pastrana Pinar del Rey r de Cristal Foria de Aeropuerto T1-12-13 T 2 Colombia Esperanza Estrecho Santiago Alvarado Bernabéu. Arturo Soria El Capricho TORREÓN Concha Ministerios Alfonso XI Canilejas PROLONGACIONES DE LÍNEA 1 LÍNEA 3 2LÍNEA 5 3LINEA 11 DIAGONAL 4MADRID NUEVO NORTE INTERCAMBIADORES 5VALDEBEBAS - CIUDAD DE LA JUSTICIA 6CONDE DE CASAL Estación Barns de Aravaca Cludad Prosperidad Cans Parque de Cartagena as Avenidas Concepe mo Tore Aries Suanges Avda deg Qurvedo Pueblo Nuevo Quintan Cluded Linsel Estadio Campus de tropolitano de Coón CALE DE CAM Argüeles Las Mosan Simancas COSLADA Alonso Garcia MADRID 7LEGAZPI 8CHAMARTÍN LAVICIOSA ODON B1 A Stro aquas Surb Prado del Rey.co Colonia de Casa Prado de la Vega Ciudad de la Imagen C Cludad Jardin Laguna del Cine Campamento de Vadilo Urgel Carpetand Comillas Carabanchel Oporto Aviación Vientos Cats Vent Alache Alegre de Montijo Abrantes Plaza Eliptica BB Pan Bendito Carabanchel Altoma San Francisco La Peseta La Fortunat Espala Cold Serrano y La Elpa San Blas Las Rosas E Central FERNANDO Fernando Jarama Principe Pio R O'Donnel Avda de 3 Quadalajara 6 Alsacie BL Honares Extación Brand Conde de Casal Alto de Extremadura Vinateros A Arter Acacles MedConde Payo de Casal Vicalvaro San Cipriano Pavones Puente de Valleces Madrid Rio Arganzuela Lego Almendras Legazpi 7-09 Valdebernardo Hospital 12 de Octubre San Fermin-Orcasur Ciudad de os Angeles Villaverde Bajo-Cruce + en 2022 299 Km TOTAL RED 302 Estaciones 4 Nuevos Intercambiadores Metro▸ CRECE +de 40 Km CONSORCIO TRANSPORTES MADRID en 2030 340 Km TOTAL RED 337 Estaciones (10%Automático) 2.428 M€ 159 M€ Comunidad Oesle XICON CÔN. Dirección General de Infraestructuras de Transporte Colectivo. CONSEJERÍA DE TRANSPORTES de Madrid E INFRAESTRUCTURAS LEGANEverde Alo Cristóbal Septe San Nicasio Leganés Julián Besteiro Centrat 1 del Relo Hospital Severo Ochoa El Casar 2019/2030 4 new bus interchanges and more than 40 new Km in metro lines by 2030 Source: Comunidad de Madrid 2.587 M€ 74#75Overview Green Bond Funding Strategy Comunidad de Madrid 3 Green bonds issued up to date totaling a size of 1,700M EUR 2021 & 2022 Green Bonds allocated to clean transportation projects fully aligned with EU Taxonomy Continued assessment towards implementing alignment on EU Taxonomy regarding other green categories, such as Waste Management and Environmental Conservation Annual Green Bond eligible portfolio over 700M EUR Annual impact report published on Comunidad de Madrid Website* Committed to at least one Green Bond issuance per year Comunidad de Madrid is a relevant Green Bond Issuer Source: Comunidad de Madrid *https://www.comunidad.madrid/en/inversion/relacion-inversores/deuda-sostenible Waste Management 5.7 M Environmental Conservation 11.6M 694,6 M Clean Transportation 75#76Comunidad de Madrid 2022 Green Bond review Final Terms and Conditions Issuer Issuer Ratings Format Ranking Risk Weighting Size Maturity Settlement Coupon The Autonomus Community of Madrid A-/Baa1/A-/BBB (S&P/Moody's/DBRS/Fitch) RegS, Bearer Dematerialised Senior, Unsecured 0% EUR 500m 31-October-2029 14-October-2022 (T+8) 2.822% Fixed, Annual, Act/Act - Long first 100% / 2.822% / SPGB + 23 bps SPGB 0.6 10/31/29 @ 87.282% HR 107% AIAF Reoffer Price Benchmark Listing Min Denoms €1k + €1k Bookrunners ISIN BBVA, CaixaBank, Crédit Agricole CIB, ING and Santander ES00001010JO Investor Type and Geographic Distribution 23% 17% 16% 14% 14% 9% 7% Spain France UK & Ireland Germany & Italy BeNeLux Other EU Austria 49% 46% 4% Other SRI 1% 49% 51% Fund Managers Banks Ins & PF HF Transaction Highlights • On Tuesday, October 4th, 2022, the Autonomous Community of Madrid successfully launched and priced its third Green bond deal and second public transaction in 2022. ⚫The bond issued under Autonomous Community of Madrid's existing Sustainable Finance Framework, becomes the first public sector issue in Spain - and one of the few in Europe - to be fully aligned with the EU Green Taxonomy. • The transaction was preceded by a week-long marketing exercise with European investors: • On October 3rd, the Autonomous Community of Madrid formally mandated the banks for a new 7yr Green Bond with the objective to launch the transaction in the near future subject to market conditions. • On October 4th, the order book was officially open with a price guidance of SPGB+23 bps. • Books closed with a total demand of EUR 500M and final spread of SPGB+23bps allowing Comunidad de Madrid to print a successful deal in a very challenging and volatile market and consolidating its leading position as ESG bond issuer, being the first Spanish public sector issuer to launch 3 green bond deals. • In terms of metrics the orderbook was well supported by international investors accounting for 77% of the total demand. The quality of the orders also allowed to allocate 53% of the notes to Real Money accounts. 6 76#77Highlights of the 2022 Comunidad de Madrid's Third Green Bond { • The 2022 Green bond issued in October 2022 represented the third Green bond offering of Comunidad de Madrid. Comunidad de Madrid is the only region in Spain issuing Green Bonds. H EU Comunidad de Madrid is committed to keep on promoting the ESG bond market and sustainable investments with a Framework that allows the Region to issue Green, Social and Sustainable Bonds. • • The proceeds of the bond have been allocated to expenditures in Clean Transportation. 2022 Green Bond use of proceeds is fully aligned with the EU Taxonomy (100% of the use of proceeds allocated). The projects will contribute to one environmental objective as defined the EU Taxonomy, Climate Mitigation. Avoided a total of 240,458 CO2eq atmospheric emissions. Comunidad de Madrid engaged with a third party to assess compliance with the EU Taxonomy*. Strong demand from dedicated ESG investors. *https://www.comunidad.madrid/sites/default/files/img/profesiones/cam_eu_taxonomy_alignment_spo_-_dnv_eligibility_assesment-vfinal.pdf Source: Comunidad de Madrid 77#78Green Bons Eligible Expenditures portfolio for 2022 Eligible Category Climate change and environmental management Overview of the Green Eligible Expenditures 2022 Main eligible expenditures Budgetary Programme Budget code UN SDGs EU Environmental Objectives Waste Management: 16: Environment, Measures to implement the Waste Strategy of Comunidad de Madrid Local administration 11 456N 456B SUSTAINABLE CITIES AND COMMUNITIES EU Objective 4: Circular economy and territorial planning Clean transportation: • Promote the manufacture and use of the electric vehicles and points of recharge Promote public transport services and modal shift towards public transportation (e.g. railway, metro de Madrid, bus system) and soft mobility, support multimodal transport solutions and promote the use of bicycles 11 SUSTAINABLE CITIES AND COMMUNITIES 14: Transport, Social Housing & Infrastructure 453N 456B 13 :::: CLIMATE ACTION EU Objective 1: Climate Change Mitigation 15 ON LAND LIFE EU Objective 6: protection and 456A and territorial planning restoration of biodiversity and ecosystems Environmental conservation: • Management and restoration of Protected Natural Parks and other unique spaces with important conservation value 16: Environment, Local administration Source: Comunidad de Madrid 78#79Green Bond Eligible Expenditures portfolio for 2022 (II) Green categories Waste Management Overview of the Green Eligible Expenditures Portfolio 2022 Clean Transportation 11 SUSTAINABLE CITIES AND COMMUNITIES Environmental Conservation Source: Comunidad de Madrid UN SDGs Amount (EUR m) Subcategories Amount (EUR m) 11 SUSTAINABLE CITES AND COMMUNITIES Domestic Waste Management 4.7 5.7 Maintenance of the Air Quality Network 1.1 EMT Bus 86 Intercity Bus 85.2 Metro 388.0 694.6 13 CLIMATE ACTION Measures for the Promotion of Sustainable Mobility 2.0 Light Train 133.3 Environmental Education 1.6 Conservation of Protected Natural 5.3 Areas Connectivity through Green Infrastructure 2.6 15 N ON LAND 11.6 Protection of Wetlands 0.2 711.9 Recovery and improvement of private forest areas 1.5 Grants to NPOS with Environmental Purposes 0.5 711.9 79#80Impact indicators Green Bond Eligible Expenditures portfolio for 2022 (1) Overview of the Green Use of Proceeds Main Eligible expenditures Waste Management Clean Transportation Impact Indicators UN SDGs Amount (EUR m) Subcategories Domestic Waste 11 AND COMMUNITIES SUSTAINABLE CITIES Amount (EUR m) Managed Waste (tn) Data Samples Collected Emissions Avoided (tCO2) Vehicles Subsidized Number of Programs Intervened Surface (ha) Projects Selected 4.7 73,560 Management A 5.7 Maintenance of the Air 1.1 Quality Network EMT Bus 86.0 SUSTAINABLE CITTEN AND COMMUNITE Intercity Bus 85.2 Metro 388.0 1,464,484 10,503 55,847 228,336 694.6 ELINATE 13 ACTION Measures for the Promotion of Sustainable Mobility 2.0 4,898 Light Train 133.3 8,299 Environmental 1.6 15 Education Conservation of Protected Natural 5.3 118,527 Areas Connectivity through 2.6 581 Green Infrastructure Environmental Conservation 15 FE ON LAND 9.0 Protection of Wetlands 0.2 Recovery and improvement of 1.5 private forest areas Grants to NPOS with Environmental 0.5 Purposes 711.9 Source: Comunidad de Madrid 117 339 13.0 711.9 73,559.9 1,464,484.0 302,985.8 4,898.0 15.0 119,564.0 13.0 80#81Clean Transportation Eligible Expenditures portfolio for 2022 Overview of the allocation of bond proceeds Impact Indicators EU Taxonomy (6.3 Urban and suburban transport, road passenger transport) Green category UN SDGs Subcategories Allcoation Emissions Amount Avoided (EUR m) (tCO2) Objective Primary EU Environmental EU Technical Screening Criteria DNSH Minimum Criteria Safeguards EMT Bus 86 10,503 11 SUSTAINAN EGITES AND COMMUNIT Intercity Bus 85.2 Clean Transportation 55,847 EU Objective 1: 13 CLINTATE ACTION Metro Climate Mitigation 388.0 228,336 133.3 Light Train 8,299 Source: Comunidad de Madrid 692.5 302,986 81#822022 Green Bond: Allocation and Impact reporting Overview of the allocation of bond proceeds Impact Indicators EU Taxonomy (6.3 Urban and suburban transport, road passenger transport) Primary EU Environmental EU Technical Screening Criteria DNSH Minimum Criteria Safeguards Green category UN SDGs Subcategories Allcoation Emissions Amount Avoided (EUR m) (tCO2) Objective Clean Transportation 11 SUSTAINABLE GITES EMT Bus 86 10,503 AND COMMUNITIES A Metro 388 228,336 EU Objective 1: Climate Mitigation CLIMATE 13 ACTION Light Train 26 1,619 500 240,458 Emissions avoided by Clean Transportation initiatives funded by the 2022 Green Bond proceeds are equivalent to in excess of those of 53,503 gasoline- powered passenger vehicles driven for one year Source: Comunidad de Madrid 82#83Comunidad de Madrid Green Bond 2022: Impacts in the Region's Public Transport XD • . Metro: the equivalent distance travelled by car would have caused 525,820.86 tCO2 emissions EMT bus: the equivalent distance travelled by car would have caused 13,139.35 tCO2 emissions. • Intercity bus: the equivalent distance travelled by car would have caused 89,631.14 tCO2 emissions. Light trains: the equivalent distance travelled by car would have caused 11,824.63 tCO2 emissions 2022 Emissions Avoided by Green Public Transportation means in the Region (tCO2): 600,825 83#84EU Taxonomy alignment process 2022 Green Bond Comunidad de Madrid In 2022, Comunidad de Madrid carried out an exercise to asses which proportion of its Green bonds use of proceeds were aligned with the EU taxonomy. In this regard, Comunidad de Madrid engaged with a third party, DNV to asses Comunidad de Madrid's 2021 Green Bond Use of Proceeds (fully allocated into the Clean Transportation category) compliance with the EU Taxonomy and has received a positive assessment. Comunidad de Madrid, based on that assessment has replicated the allocation process for its Green Bond issued in October 2022 and therefore confirms that the 2022 green bond is fully aligned with the taxonomy. Comunidad de Madrid has reviewed the Clean Transportation expenditures towards the EU Green Taxonomy 1. Contribute substantially to one or more of the environmental objectives 2. Do no significant harm to other environmental objectives Taxonomy full alignment assessment 3. Comply with minimum social safeguards 4. Comply with technical screening criteria Comunidad de Madrid Green Bond is fully aligned with the EU Taxonomy 84#85DNV opinion on Taxonomy alignment assessment DNV WHEN TRUST MATTERS Finding and DNV's Opinion Alignment to EU Taxonomy dated September 2022 GREEN BOND ALLOCATION AND IMPACT REPORTING EU Taxonomy Alignment Comunidad Autónoma de Madrid Report No.: 1, Rev. 1 Document No.: PRJN-446392 Date: 23/09/2022 Table 1: Compliance with the technical screening criteria EU Taxonomy Technical Screening Criteria The activity provides urban or suburban passenger transport, and its direct (tailpipe) CO₂ emissions are zero Until 31 December 2025, the activity provides interurban passenger road transport using vehicles designated as categories M2 and M3 that have a type of bodywork classified as 'CA' (single-deck vehicle), CB' (double-deck vehicle), CC (single-deck articulated vehicle) or 'CD' (double-deck articulated vehicle), and comply with the latest EURO VI standard, .e. both with the requirements of Regulation (EC) No 595/2009 and, from the time of the entry into force of amendments to that Regulation, in those amending acts, even before they become applicable, and with the latest step of the Euro VI standard set out in Table 1 of Appendix 9 to Annex 1 to Regulation (EU) No 582/2011 where the provisions governing that step have entered into force but have not yet become applicable for this type of vehicle. Where such standard is not available, the direct CO₂ emissions of the vehicles are zero. N.A. Project EU Taxonomy Alignment-Comunidad de Madrid Use of proceeds for Metro (EUR 387.8 million) and electric buses (EUR 105.375 million) are zero emissions and hence considered aligned with substantial contribution criteria set by the EU Taxonomy. Use of proceeds for Hybrid busses (EUR 11.125 million) fit Regulation 2020/852 and are aligned with the technical screening criteria. Comunidad de Madrid has provided type approvals and techinical specification of the busses showing compliance with EURO VI standard. in as a transitionall activity as referred to in Article 10 of Emissions avoided with this LoP have been calculated by Comunidad de Madrid as 137,895 tCO2 for Metro, and 6,280 tCO2 for busses (EMT). Table 3: Compliance with the minimum social safeguards Minimum social safeguards As per article 18 of Regulation (EU) 2020/852: The minimum safeguards referred to in point (c) of Article 3 shall be procedures implemented by an undertaking that is carrying out an economic activity to ensure the alignment with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights: Project EU Taxonomy Alignment - Comunidad de Madrid CSR Policy and Code of Conduct is in place for both Metro and EMT, aligned with the principles and rights set in the UN Guiding Principles on Business and Human Rights and the principles and rights set out in the fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights. As part of public administration, procurement is regulated by the Public Sector Contracts Act and subject to principles and including requirements of responsible procurement, compliance with ethical standards and respect for the human rights, integrity, transparency and protection of the environment. DNV has reviewed the information provided and concludes. that Comunidad de Madrid complies with the minimum social safeguards in Article 18 of Regulation (EU) 2020/852. "On the basis of the information provided by Comunidad de Madrid and the work undertaken, it is DNV's opinion that proceeds have been used on Clean Transport projects that are aligned with the criteria established in the EU Taxonomy for Sustainable Activities- ANNEX 1 to Regulation (EU) 2021/2139 Section 6.3 (i). for DNV GL Business Assurance España S.L.U." Table 2: Compliance with the "Do no significant harm" ("DNSH") criteria. DNSH Criteria (2) Climate change adaptation The activity complies with the criteria set out in Appendix A to Annex 1 (EU) 2021/2139. (3) Sustainable use and protection f water and marine resources NA (4) Transition to a circular economy Measures are in place to manage waste, in accordance with the waste hierarchy, both in the use phase (maintenance) and the end-of-life of the fleet, including through reuse and recycling of batteries and electronics (in particular critical raw materials therein). (5) Pollution prevention and control For road vehicles off categories M, tyres comply with external rolling noise requirements in the highest populated class and with Rolling Resistance Coefficient (influencing the vehicle energy efficiency) in the two highest populated classes as set out in Regulation (EU) 2020/740 of the European Parliament and of the Council and as can be verified from the European Product Registry for Energy Labelling (EPREL). Where applicable, vehicles comply with the requirements of the most recent applicable stage of the Euro VI heavy duty emission type- approval set out in accordance with Regulation (EC) No 595/2009. (6) Protection and restoration of biodiversity and ecosystems NA Project EU Taxonomy Alignment - Comunidad de Madrid Following climate change vulnerability and risk analysis, Comunidad de Madrid issued Plan Azul 2013-2020, a strategical program of measures for mitigation and adaptation to climate change, to be implemented in Comunidad de Madrid. Furthermore, a new strategy is under development. that will set out the broad lines of action up to 2030 to make progress in terms of climate action (mitigation and adaptation) and improvement of air quality, in line with recent international and national guidelines and requirements. The UOP in Metro and Busses is deemed not to interfere with the adaptation measures contained in Plan Azul, measures for water resources, other vulnerable systems and industries, indicators for climate change adaptation, reforestation, increase of carbon sequestration in agricultural soils in the region. DNV considers this is in line with the criteria established for Climate Change Adaptation in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Not applicable as per Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. However, Metro has provided evidence of extensive water use and management plans for each underground station showing plans and measures to mitigate effects on water resources. Metro de Madrid and EMT operate under an Environmental Management Systems certified according to ISO 14001. Responding to a new organisational model in Mietro, actions and initiatives are implemented based on integral sustainability, using and optimising stocks and flows of resources (water and energy), materials and waste. Among others recovery of more than 95% of the waste generated. including batteries and electronic products, through improved waste segregation and management. A strategic plan in place in EMT for circular economy includes projects like the design and construction of a Hydrogen Fuelling Station and purchasing of biogas for the supply of CNG. DNV considers this is in line with the criteria established for circular economy in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Comunidad de Madrid has provided type approvals and technical specification of the busses showing compliance with EURO VI standard and external noise requirements. DNV considers this is in line with the criteria established for pollution and prevention control in Commission Delegated Regulation (EU) 2021/2139, Annex 1, 6.3 Urban and suburban transport, road passenger transport. Not applicable as per Commission Delegated Regulation (EU) 202 1/2139, Annex 1,6.3 Urban and suburban transport, road passenger transport 85#86Clean Transportation Impact Calculation Methodology 1.- METHODOLOGICAL BASES To quantify the emissions avoided by the use of regular public passenger transport in relation to hybrid or electric buses and rail modes (metro and rail concessions), it is assumed that if these trips had not been made by public transport, they would have been made by using private vehicles. In this way: Emissions Avoided = Emissions generated by the private vehicle Emissions generated by public transport To calculate the emissions that would have been produced by the travel of passengers in private vehicles, the number of passenger-km (1) that have used public transport in electric or hybrid modes will be multiplied by an emission factor based on the circulating fleet of passenger cars in the Community of Madrid, according to data from the DGT for 2020 (latest available). To calculate the emissions generated by trips Imade by public transport users in electric or hybrid modes, the energy consumed in these trips is multiplied by the emission factors mentioned in section 5. 2.- YEAR OF CALCULATION: 2022 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 (TFM, MLM, MLO, Tramway) Parla 4.- ACTIVITY DATA Road modes: Vehicle characteristics (Euro standard, fuel type) Fuel/electrical energy consumption of vehicle fleets or, alternatively, kilometers traveled per year Railway modes: Electricity consumption 5.- EMISSION FACTORS CO2 emission factors for fossil fuels published by the Spanish Office of Climate Change (OECC), year 2022 Diesel fuel B7: 2.519 gr CO2eq/liter CNG: 2.783 gr CO2eq/kg Electricity emission factors year 2022. (Published by the CNMC): marketer without REC 2022: 273 gr CO2eq/kWh marketer with REC: 0 gr CO2eq/kWh - Average private vehicle emissions: Prepared by the authors based on the number of cars in circulation in the Community of Madrid, according to Dirección General de Trafico data for 2020 (latest available). Average private vehicle (occupancy 1.2 passengers): 146 g CO2eq/km (1) Travelers-km = No. of trips x Average trip length 86#87Thanks 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. 87#88ANNEXES CONSEJERÍA DE ECONOMÍA, HACIENDA Y EMPLEO Comunidad de Madrid#89Overview of outstanding Sustainable transactions Settlement Maturity Amount Settlement Maturity Amount Settlement Maturity Amount BILATERAL LOANS SUPRANATIONAL LOANS SUSTAINABLE PLACEMENT Social Loan 2016 2026 Sustainable Loan 2017 2032 Sustainable Loan 2018 2032 20.000.000 240.000.000 340.000.000 Sustainable Loan Sustainable Loan 2018 2027 2020 2029 Health Social Loan 2020 2033 70.000.000 130.000.000 140.000.000 Private Placement (Social). Private Placement (Sustainable) 2016 2031 48.000.000 2018 2058 238.000.000 Private Placement (Sustainable) 2020 2050 265.000.000 Sustainable Loan 2018 2028 39.000.000 Health Social Loan 2020 2035 465.000.000 Private Placement (Health Social) 2020 2023 52.000.000 Sustainable Loan 2019 2030 50.000.000 Health Social Loan 2020 2035 135.000.000 Public Benchmark (Sustainable) 2018 2028 1.000.000.000 Sustainable Loan 2019 2029 97.000.000 Health Social Loan 2020 2033 51.000.000 Sustainable Loan 2019 2030 220.000.000 Health Social Loan 2021 2034 9.000.000 Sustainable Loan 2020 2023 100.000.000 Sustainable Loan 2022 2035 10.000.000 Sustainable Loan 2022 2033 100.000.000 Public Benchmark (Sustainable) Public Benchmark (Sustainable) Public Benchmark (Sustainable) 2019 2029 1.250.000.000 2020 2030 1.250.000.000 2021 2031 1.000.000.000 Health Social Loan 2022 2041 200.000.000 Green Loan 2022 2034 300.000.000 Public Benchmark (Sustainable) 2022 2032 1.000.000.000 Health Social Loan 2022 2037 200.000.000 Sustainable Loan 2022 2037 100.000.000 Sustainable Loan 2022 2035 25.000.000 Social Loan 2022 2032 100.000.000 Public Benchmark (Sustainable) GREEN BOND 2023 2033 1.000.000.000 Sustainable Loan 2023 2036 Sustainable Loan 2022 2027 50.000.000 TOTAL 165.000.000 1.600.000.000 Public Benchmark (Green) 2020 2027 700.000.000 Green Loan 2022 2031 100.000.000 Public Benchmark (Green) 2021 2028 500.000.000 Sustainable Loan 2023 2033 500.000.000 Public Benchmark (Green) 2022 2029 500.000.000 Sustainable Loan 2023 2035 300.000.000 Sustainable Loan 2023 2035 100.000.000 Public Benchmark (Green) TOTAL 2023 2028 600.000.000 9.403.000.000 Sustainable Loan 2023 2034 140.000.000 Sustainable Loan 2023 2034 100.000.000 Sustainable Loan 2023 2035 30.000.000 Sustainable Loan 2023 2034 300.000.000 Green Loan 2023 2032 75.000.000 Sustainable Loan 2023 2034 Green Loan 2023 2032 TOTAL 50.000.000 100.000.000 3.551.000.000 TOTAL SUSTAINABLE 14.554.000.000 Source: Comunidad de Madrid 89 99#90Debt issuance Procedure: Public issue (I) Authorizations *Authorization from the Regional Government. + Authorization from the Central Government. Contact with Investors and Financial Institutions * Continuous contact is maintained with investors and financial institutions, indicating deadlines, levels and amounts in which Comunidad de Madrid has more interest. •Instructions to a group of institutions that are selected taking into account those which have realized higher amounts of private placements with Comunidad de Madrid, as well as those which have participated successfully in public issue of equivalent terms of the Treasury; FADE, ICO, FROB and even private companies. If market conditions are good the transaction will carry out. *Range price formation. The syndicate, in communication with Comunidad de Madrid, sets a price range to trade the issue within the agreed timeframe with Comunidad de Madrid; the eventual commission to be received by the syndicate is discussed, and on the issue date, Comunidad de Madrid informs via email of the roles to be played by each one of the participants of the group and seeks the approval of the syndicate. *Onthe scheduled issue date, the transaction is announced on the trading screens of Bloomberg and Reuters in order to capture the attention of investors. •The order book is opened. The order book is closed. Fixing of Issue Price *Once the bonds have been allotted to the investors who have recorded orders in the book, a time is announced to fix the issue price; at the scheduled time, a joint call for fixing the price is made. Once Comunidad de Madrid and all banks are connected online with the screens of Bloomberg, the transaction is priced in accordance with the agreed terms in the Termsheet, based on the Treasury references. Fixing the issue price, coupon and IRR for the transaction. A first simulation of the relevant calculations is made. Documentary Process *Sending the final Termsheet, with the terms and conditions of the transaction that has just been established, to his approval. At this stage, a distribution by type of investor and nationality is requested. At this point, the institution that has been assigned this role, advises Bloomberg of the price, date, coupon, and ISIN code for the transaction. •Preparation internal report to be signed by the Managing Director of Financial Policy, Treasury and Real Estate and then sent out to our Legal Services. •Legal Service, in accordance with the terms of the report, applies for the corresponding ISIN code to the Bank of Spain and prepares the transaction authorization order to be signed by Regional Minister of Economy and Finance once it has been examined by the Intervención Delegada de Tesorería. *The Orden is published in the BOCM at least two days before payment takes place, since during this period of time the Bank of Spain must be advised of the list of subscribers and the application for the credit of securities; this Order becomes the Prospectus for the public issue. Letters are also sent to the rating agencies in order to request an specific rating for the transaction in question, that is submited to the subscribing institution. • At the same time, over this period, Legal Services, along with the Financial Institution, prepare the Contract which is signed the day before disbursement day and requires a preparatory report by Legal Sercices and by the Intervención Delegada de Tesoreria. That Contract: ⚫Is a suscription contract. *Is excluded from the scope of Law 30/2007, of 30 october, on Public Sector Contracts. Disbursement :T+7 *Disbursement :T+7 *At this stage, the rating letters from the rating agencies are submitted to the subscribing institution. Source: Comunidad de Madrid 90 90#91Debt Issuance Procedure. Private placement or retap (II) Authorizations • Authorization from the Regional Government. • Authorization from the Central Government. Contact with Investors and Financial Institutions • Continuous contact is maintained with investors and financial institutions, and the comunications indicate that Comunidad de Madrid has the necessary authorizations to execute financial transactions, as well as the deadlines, levels and minimum, amounts that interest us. • A specific offer is submitted by an investor o financial institution which should have been assigned a code by the Bank of Spain (Banco de España); for this reason, sometimes the operation is carried out through a bank that has been assigned such code and functions as an intermediary. •The offer submitted is then studied by means of an indicative termsheet, in which key elements that must be included are: • Amount • Princing date •Date of disbursement *IRR all-in (including all commissions) indicating the Treasury reference levels. Fixing of Issue Price • Once the operation has been internally approved, taking into account the financial strategy of Comunidad de Madrid, the pricing time is fixing with the financial institution. • On the day and agreed time for princing, the financial institution contacts by telephone with Comunidad de Madrid in order to establish the price. ■Connected online with the screens of Bloomberg, and in accordance with the terms established in the indicative Termsheet, a first simulation of the relevant calculations is made, and if the parties agree, the transaction is established in a real way. Documentary Process • The final Termsheet, with the terms and conditions of the transaction that has just been established, is submitted to the issuer for his approval. At this stage, a distribution by type of investor and nationality is requested. At this point, the financial institution advises Bloomberg of the amount, coupon, maturity date and ISIN code for the transaction. • Preparation Internal Report to be signed by the Managing Director of Financial Policy, Treasury and Real Estate. • Legal Services, in accordance with the terms of the Report, applies for the corresponding ISIN code to the Bank of Spain (provided that the transaction is not a reopening) and preparesthe authorization order to be signed by the Regional Minister of Economy and Finance, once it has been examined by the Intervención Delegada de Tesorería. •The Order is published in the BOCM at least two days befores payment takes place. Bank of Spain is advised of the list of subscribers and the application for the credit of securities.This Order becomes the Prospectus for the private placement. Letters are also sent to the rating agencies in ordento request an specific rating for the transaction in question, that is submited to the subscribing institution. • Atthe same time, over this period, Legal Service, along with the Financial Institution, prepare the Contract which is signed the day before disbursement day and requiresa preparatory report by Legal service and by the Intervención Delegada de Tesorería. Said Contract: Is a subscription contract. *Is excluded from the scope of Law 30/2007, of 30 october, on Public Sector Contracts. Disbursement (T+6) • Disbursement: T+6 • At this stage, the rating letters from the rating agencies are submitted to the subscribing institution. Source: Comunidad de Madrid 91#92Affordable 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 92 92#93Education Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at providing educational programs and vocational training to youth, as well as allowing for a successful integration of disadvantaged groups in the education system, preparing them for future labor market opportunities. Eligible expenditures include: • • • • . Construction, rehabilitation and maintenance of public education schools; Construction, rehabilitation and maintenance of public education centers; Acquisition of equipment to ensure a quality education in public education schools; Financing expenses related to home educational support service (SAED), hospital classrooms (AAHH) and therapeutic educational centers (CET); Financing educational programs and vocational training for young people at risk of exclusion or unemployed; Collaboration to support the integration of students with special educational needs; Expenses related to subsidized school transport services; Financing the development and maintenance of public universities; Providing financial support to university students, based on socioeconomic criteria such as income level and patrimony, or disabilities. Source: Comunidad de Madrid Comunidad de Madrid finances public education for all, and devolves particular attention to allocate resources to guarantee access to education for disadvantaged students 93 93#94Healthcare • • 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 94 56#95Social Inclusion Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at supporting, integrating and providing basic services to several vulnerable population groups (victims of domestic violence, the elderly, risk population and minorities, physically and/or disabled people, etc.) and to integrate, education and employment programs as well as financial assistance to vulnerable groups at risk of social exclusion. Eligible expenditures include: Fighting against domestic violence and promotion of equal opportunities; Support integration of families and individuals at risk (social action and education); • Provision of financial assistance (i.e minimum income) to people at risk of social exclusion; • Ensure universal accessibility to the MADRILENA CONTRA LA VIOLENCIA DE GENERO 016/2021 Robin food 1 Pro public transportation system; • Support to the elderly; • Support to the mentally and/or physically disabled. Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies Source: Comunidad de Madrid 95 95#96Economic Inclusion & SME Financing Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects and programs aimed at promoting labor market entry opportunities for long-term unemployed or people with lower employment prospects, and financing SMEs in the Comunidad de Madrid. This activity will contribute to the growth and development of Madrid's economy, hence promoting employment creation and retention. Eligible expenditures include: • • • • Supporting professional training directed at the unemployed in the Comunidad of Madrid; Conducting studies and labor market research to plan and implement policies of employment; Support in orientation programs for those distant to the labor market that allow for a direct contact with employment agencies and employers; Promote integration in the labor market of persons with disabilities and those who are in risk of social exclusion; Provide finance to SMEs, including start-ups in order to stimulate their competitiveness and job creation; Provide training and advice to commercial SMEs to help them improve their skills and business; Support SMEs in the Handicraft and Artisan Market to improve their competitiveness. PRESEVUSTENERALES DELA COMUNIDAD DE MAD PROGRAMAL 1211 MEMORIA DE PROGRAMA INDESTRIA DG DE INDUSTRIA, ENERGIA Y MINAS consumo La Dirección General de Industria, Energia y Minas tiene de la eficiencia energética, para reducir e ciu dedenos madrileños, consiguiende asi incrementa reducir muestre dependencia energética y coedyurar a le Uno de los instrumentos más destacados de esta poli que, además del ahorro de energía y le reducción de seguridad de las instalaciones y mentalizar los Gu importancia de la eficiende energétics. Desde el año 20 cabo aproximadamente 115.000 actuaciones, con lo acumulade cercano a 200.000 toneladas equivalentes e de emisiones cemara a un millón de taneladas de Coz Para 2019 se continuerà con los Planes Renove más re endrán algunos nuevos que están en fexe de estudio Fundación de la Energia de la Comunidad de Madrid, Otro de los objetivos básicas de la Discode Genera Comunidad de Madrid En este sentido, con el fin de co se considera necesario llevar a cabo actuadores en industriales, para incrementar la competitividad de las más atractivas a nuevos inversores, que buscan donde u En concreto, se considera que lo más adecuado, en ord utilización de los fondos disponibles, es actuar so industriales, lo que redundarà en una mejora de las cor actividad, y, por tanto, en una mejora de su competitivid En esta linea, se incentivará también la mejora de at medarte la sustitución de lámparas y luminar energéticamente y la instalación de reguladores de fiu incentivar el autoconsumo energético en las empres campos solares termicos y fotovoltaicas, y de plantas de Por otra parte, se apoyará la utilización de vehiculos combustibles fosiles convencionales. El impulso de esto movilidad más sosten ble En concreto, se apoyará la e recarga cuyo desplegue permisrácubrir las necesidade consumo de energia, reduciendo a la vez su nodencia c En 2019 se continuari, par tarto, con el fomento de para lograr un despliegue que permita la diversificacor PROGRAMA சேய்ஸ் MEMORIA DE PROGRAMA 43 ECONOMIA 11 DG.DE ECONOMÍA, ESTADISTICA 1 COMPETITIVIDAD Siguendo la directical marcada por el Cobierno de la Coma de Madrić, as consideran ajai prioritarios de la definitión de la Palities Feandmis fogonal lo pomacion y donelle sennamine y financiero vu precisa una rápida adotación a tranferencia mundar as nuevan circunstancies que permitan no soo evitar una perdida mundo emaresarial, para lo que se si incluso liderer el proceso de innevasión tecnológica la primera fase de este proceso de mejor de la competitividad empresarial se realiza a través de la realización de informes estudios e investigaciones que penian conccer tendencias en el comportamiento de la economic regional y de sus diferentes sectores, y, en corecuencia, permitan prever posities incas de actuación para las policas públicas en favor del tejido enpresetal y, en especial de las pequeño y medianas mpresas madrileña que siendo afectadas en su funcionamiento y vidad En al desa de estos intramentas bores de análise nunta con la permanente y activa colaboración de los angenismos y asociaciones representantes del tejido empresarial. Otro de los objetivos primordiales en materia de desarrollo económico es el apoyo a las politicas de mejora de la economa madrileña y de a sectores productivos, a traves del impubo competitividad y el empleo, por medio de la elaboración de planes y programas de actuación de vectores y colective Eneste mares y de acuerdo con lo competencies asgoederate Dirección General se establecen las lineas de actuación a fix de conseguir una actuación gefcas eficiente y próxima a las necesidades de la concia regional Por todo el en este ejercitio, se sigue apestando por el mayor conocimiento y anisis de la realidad económica de la región y por el impulso a la creación y desarrollo de nuevo tejido empresarial, entre les que cabe destacar los siguientes Ebonión de estem ber dieses antes estreligion y press relevantes de la economia, sea de forma directa, mediante trabajo intemo, sea a través de ipoyo externo a par medio de colaboraciones con mere organismos espacializados Divulgación y publicación de las actuaciones de apoyo a la actividad empresarial por parte do Dirección General Promoción del conocimiento de la realidad socioeconómica a través de diferentes foros, seminars y jornades sobre le economia y el empies en laregion, así como a través de diverses publicaciones As prospectiva dei entomo acondnice regional tanto an relación con el resto de ragiona mpañolascono con las principales regiones europeas Desamolo y promoción económica y financera cel tejido empresarial de Madrid con especial atención a las peme Apoyo y gestión del refinament de proyectos de inversión de pynes a través de v The support provided to Madrid's SMEs, will strengthen the competitiveness of SMEs and leading to the creation and preservation of jobs, and promote the integration of vulnerable people Source: Comunidad de Madrid 96 96#97Climate 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 97