Poland updates green bond framework ahead of possible first issuance in six years

WARSAW (Reuters) -Poland has updated its green bond framework, the finance ministry said late on Wednesday, as one of the European Union's most coal-reliant economies gears up for its possible first green bond issuance in six years.

In January, finance ministry debt chief Karol Czarnecki said that "it's a high probability" Poland would issue green bonds this year, without giving further specifics on the timing or the size of the issuance. It last sold them in March 2019.

Sovereign green bonds are government-issued debt instruments used to finance environment-friendly projects for sustainable development.

The updated framework is based on the International Capital Market Association (ICMA) principles from 2021 and its pre-issuance checklist, which together outline how the proceeds can be used and managed, the process for project evaluation and selection, as well as the reporting requirements.

Eligible projects will include those involving renewable energy, energy-efficient buildings and "green infrastructure", clean transport, as well as sustainable management of living natural resources, land use, water, waste water and climate change adaptation, according to the document.

Green infrastructure refers to the construction and operation of the power grid, either involving interconnection with the European system or the enabling of low-carbon generation.

On Wednesday, the Polish parliament approved legislation easing the rules around building onshore wind farms, which the government says is a key step to increase renewable energy output and lower power prices as part of a broader drive to curb Poland's reliance on coal.

However, it is unclear if the legislation will get final approval given political opposition from both the outgoing and newly elected presidents, who oppose some of the liberal government's proposed reforms.

Poland is also working towards developing nuclear power sources, with the first such unit to be completed in 2036.

(Reporting by Karol Badohal; Editing by Gergely Szakacs and Hugh Lawson)