Analysis of sustainable debt securities in Cyprus

A new report from the Central Bank of Cyprus, authored by Antonis Michis, reveals that sustainable debt securities held by Cypriot investors reached €3.4 billion by the end of the first quarter of 2026. This figure accounts for 11.5% of total debt security holdings, placing Cyprus slightly above the Eurozone average. Meanwhile, local sustainable debt issuances totaled €1.42 billion, representing 9.5% of total debt issuances. This performance ranks Cyprus fourth among the 20 Eurozone member states, surpassing Germany and significantly outperforming Greece, which holds a 5.8% share.

Despite this achievement, the report highlights a structural imbalance in the local market. The sector relies heavily on green bonds, while social and sustainability-linked bonds remain absent, indicating a lack of depth in the market. Additionally, the analysis notes that the private sector's participation in these sustainable issuances is almost entirely missing, leaving room for further development. Analysts emphasize that while Cyprus has successfully integrated into the European sustainable finance landscape, diversification of financial instruments is necessary for future growth.