Sustainable debt grows in Cyprus but market remains concentrated, CBC analysis finds
Sustainable securities accounted for 11.5 per cent of Cyprus residents’ debt holdings in early 2026, while the market remained reliant on a small number of government and banking issuances.
Nicosia, Cyprus. Sustainable debt is becoming a more significant part of Cyprus’ financial market, although it remains heavily dependent on a small number of government and banking issuances, according to analysis published by the Central Bank of Cyprus (CBC). Some important parts of the market have yet to develop.
Holdings and issuance
Sustainable securities accounted for 11.5 per cent of all debt securities held by Cyprus residents in the first quarter of 2026. They also represented 9.5 per cent of debt securities issued by Cyprus-resident entities.
The figures appeared in an article by Antonis Michis, Head of Monetary Policy Operations at the CBC, examining the development of sustainable debt holdings and issuance in Cyprus and comparing them with trends across the euro area.
Cyprus residents held €3.40 billion in sustainable debt securities at the end of March, compared with around €2.00 trillion held by euro-area residents.
Green debt leads growth
Holdings have risen since 2021, with green debt securities accounting for the largest category in both Cyprus and the wider euro area.
Green debt securities are bonds or other forms of borrowing whose proceeds are earmarked for environmentally beneficial projects, such as renewable energy or measures to reduce pollution.
The composition of Cyprus residents’ remaining holdings differs from that of the wider euro area. Residents hold proportionately fewer sustainability-linked and social debt securities, but a larger share of securities combining environmental and social objectives.
Comparison with the euro area
Across the euro area, sustainable securities represented between 3.9 per cent and 15.6 per cent of total debt-security holdings in the first quarter of 2026.
Cyprus’ share of 11.5 per cent was slightly above the euro-area average, despite its overall debt market being much smaller than those of the bloc’s largest economies.
Michis linked the growing importance of sustainable finance to the increasing economic and financial consequences of climate change.
This news item was generated automatically by Cyprus Inform from publicly available materials. Report an error →