CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

INVESTOR PRESENTATION

August 2021 TABLE OF CONTENTS

I . MACRO OUTLOOK

II. FUNDING PROFILE AND STRATEGY

III. SUSTAINABLE FINANCE

IV. GREEN BOND

2 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

I. MACRO OUTLOOK Community of Madrid key figures

GDP pc 2019* Average annual Stock of companies 2020 35,917€ (Madrid) population growth(2011- 552,027 +2,1% i.a.(Madrid) 26,426€ (Spain) 2021) 3,404,428 + 1,2% i.a. (Spain) +0.5% (Madrid) * Last official data available +0.2%(Spain) Direct Foreign Investment 2020 18,287 Mill. € +24% i.a. (Madrid) 24,528 Mill. € + 1% i.a. (Spain)

Unemployment rate R&D expenditure (1Q2021) (2019) 12.2% (Madrid) 1.7% over GDP (Madrid) 16.0% (Spain) 1.3% over GDP (Spain)

GDP: 240.1 bn € ICTs Services (2020) Population: 6,7 mil Best ranked region in advanced digital services such as Cloud computing or Big data

Source: Community of Madrid and INE Community of Madrid in Spain

The national GDP amounted to 1,244.8 billion, of which the Community of Madrid is the region with the highest contribution, 19.3% (240.1 billion euros). In terms of population, the Community of Madrid accounts for 14.2% of the total population at the end of 2020, with a figure of 6,752,763 (out of a total of 47,394,223).

Contribution by region to national GDP (2019) Population distribution by Autonomous Community (2020) Madrid 19,3% Catalonia 19,0% Andalusia 17,9% Andalusia 13,3% Catalonia 16,2% Madrid Valencia 9,3% 14,2% Valencia 10,6% Basque Country 6,0% Galicia 5,7% Galicia 5,2% Castile and Leon 5,0% Castile and Leon 4,8% Canary Islands 4,7% Canary Islands 3,8% Basque Country 4,6% Castile La Mancha 3,4% Castile - La Mancha 4,3% Aragon 3,1% Murcia 3,2% Balearic 2,7% Aragon 2,8% Murcia 2,6% Balearic 2,6% Asturias 1,9% Extremadura 2,2% Navarre 1,7% Asturias 2,1% Extremadura 1,7% Navarre 1,4% Cantabria 1,1% Cantabria 1,2% Rioja 0,7% Rioja 0,7%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 0,0% 5,0% 10,0% 15,0% 20,0%

Source: Community of Madrid and INE Community of Madrid in Europe

Madrid is the 5th largest regional economy in the EU, the 2nd largest in Southern Europe and the largest in Spain. Despite the great impact of Covid-19, Madrid has emerged stronger in S2 2020.

Region Country GDP (million €) GDP PPP (millon €)

EU - 27 13.963.897 13.963.897 Year-on-year GDP growth Ile-de-France (France) Francia 738.621 679.086 Lombardia Italia 398.779 400.627 10,0

Oberbayern Alemania 280.479 253.653 5,0 Rhône-Alpes Francia 242.843 223.269 0,0 Comunidad de Madrid España 240.130 257.621 -4.6 Cataluña España 236.814 254.064 -5,0 -4.9

Stuttgart Alemania 224.062 202.632 -10,0 -8,9 Düsseldorf Alemania 221.024 199.884 -15,0 Darmstadt Alemania 212.495 192.171 Lazio Italia 200.840 201.770 -20,0

Köln Alemania 197.110 178.258 -25,0 Eastern and Midland Irlanda 183.402 152.666 -30,0 Noord-Holland Países Bajos 177.733 151.965 III 2018 IV 2018 I 2019 II 2019 III 2019 IV 2019 I 2020 II 2020 III 2020 IV 2020 Provence-Alpes-Côte d'Azur Francia 170.734 156.973 Source: Instituto de Estadística de la C. de Madrid España UE-19 Comunidad de Madrid, INE y EUROSTAT Zuid-Holland Países Bajos 170.724 145.972 Source: Eurostat Economic Growth 2019

Solid growth and positive differentials for the region…

7 How we were at the end of 2020

The expected evolution of Madrid´s economy holds back due to the pandemic.

Community of Madrid GDP falls a 10.3% in 2020 Spain´s GDP shows a more intense fall: -11%

GDP Change (%) 2020

8 2020 quarterly growth

Madrid´s economy keeps recovering in 4Q.

GDP Big impact of the measures Quarterly change rate adopted to control the pandemic over the economy: quarterly contraction in Q2. (-24.2%) Intense reactivating in Q3: GDP´s upturn +25.5% against 2Q Madrid´s economy improves in his recovery in 4Q with a new growth (+4.4%)

9 2020 annual growth

Recovering but still far from precovid activity levels.

Pandemic outbreak and GDP lockdown (last 2 weeks of Interannual change rate March). GDP fall: -2.3% interannual in IQ 2020. Economic crash in 2Q: -26.4%. GDP partial overcome in 3Q, still in interannual setback: - 8,1%. In 4Q the recovery process continues, with an interannual fall reduction up to -4.6%.

10 Compared quarterly evolution

GDP 2020 Quarterly change rate

Falta gráfico

11 Sectorial analysis: Asymmetrical impact of the crisis

Bigger contractions in 2020: Distributions services and hospitality (-22.2%) and construction (-14.0%). Services are recovering their activity more intensively in 3Q and mostly in 4Q, meanwhile construction steps back.

12 Different affectation of the third sector.

Detail of the services branches interannual change (%) 10,0 0,5 0,0 -1,4 -2,0 -10,0 -5,7 -5,6 -2,7 -1,7 -8,3 -20,0 -9,9 -18,2 -18,2 -30,0 -7,0 -2,9

-40,0 -22,2

-50,0

-60,0 -55,0

-70,0 Hotel Business and Financial and Business Other services Distribution Services Services Source: Instituto de Estadística de la Comunidad de Madrid. I 2020 II 2020 III 2020 IV 2020 2020

Important reactivating of the whole sector in 2020 2nd half

2Q 2020 -26.0% 3Q 2020 -8.2% 4Q 2020 -4.4%

13 Community of Madrid: Key sectors

Banking, insurance, and fintech Startup Ecosystem • 92.3% of the Spanish foreign investment in financial services in Q1-Q3 • Madrid is in the top 5 of the largest entrepreneurship centers in Europe (by 2020 (91.2% in 2019). number of startups). • 1 out of 3 Spanish finance and insurance professionals work in Madrid. • 7th in Europe in capital attaction (€ 509 M in 2019). Pharma & Biotech Logistics • 34% of Spanish Pharma sector turnover. • 75% of the logistics companies operating in Spain have their headquarters • 30% of Spanish Biotech sector turnover. in Madrid. Aeronautical & Aerospace • The largest logistic area in Spain (38 million sqm ). • 62% of Spanish Aeronautical sector turnover. Design and graphic arts • 95% of Spanish Aerospace sector turnover. • Second region by number of companies of this sector (more than 3,200 – • 40% New Space companies 20% of the total), only behind Catalonia (21%). Content & Video Game Industry • 7% of the manufacturing GVA. • 11% of the employment within the manufacturing sector. • 24% of the national industry. • 33% of Spanish Content and Video game sector turnover. Higher Education IT & Communications • Highest number of students in Spain (more than 320,000). • 6 public and 9 private Universities and some of the best business schools • 91.6% of Spanish Communications sector turnover. according to FT (IESE, IE). • 61.2% of Spanish IT sector turnover. • 97.8% of the Spanish foreign investment in IT&Communication in Q1- Sustainable mobility Q3 2020. • 37% of the electric vehicles registered in Spain in 2020 are in Madrid. • 53% of the trips in public transport are in sustainable vehicles. • Leader in carsharing and motosharing in Spain.

14 Labour Market Trends 2020

Social Security Affiliation (monthly average) Comunidad de Madrid

Number of affiliates Interannual rates 2020 3,350,000

3,300,000 2.8 jan-feb

3,250,000 -2.2 mar-jun 3,200,000 -2.1 jul-sep 3,150,000 -2.1 oct- dec 3,100,000 Acum. 2020 (ene- -1.3 dec) 3,050,000 2019 2020 2021 Promemory: 3.4 3,000,000 Año 2019 jan feb mar apr may jun jul ago sep oct nov dec -4.0 -2.0 0.0 2.0 4.0 Historical information of the serie (since 2004): Max: 3.302.523 (dec-19) Min: 2.564.114 (jan-04) Source: MISSYM

15 Growth estimates of Community of Madrid for 2021

Upward pressures Considerable different forecasts  Administration of the vaccines to a sufficent % of the population, during the first quarter of 2021. On average, projected growth for 2021 is 6.9% for C. Madrid, alongside this figure for Spain.  ApProval of some efficient treatment against COVID-19.  Tranfer of the first funds of the Recovery and GDP growht forecasts. Community of Madrid and Spain Resilience Facility and REACT EU. Real GDP Change rate

2021 Downward pressures 10.0 9.0 8.0 7.4 7.7 × New waves and restrictions 7.0 6.7 6.0 × Transformation of the liquidity constrains into threats 5.5 5.0 to the financial solvency of firms. 8.6 4.0 7.9 3.0 6.5 BBVA BBVA BBVA Research Research Research 2.0 4.7 2020 2021 2022 1.0 Andalucía -11,2 5,4 6,6 0.0 jan-21 feb-21 mar-21 dec-20 Aragón -9,7 5,6 6,4 Asturias -10,9 5,3 6,0 BBVA Research Hispalink CEPREDE FUNCAS Islas Baleares -17,5 10,3 11,0 Islas Canarias -15,0 8,1 9,6 2021 C. of Madrid Cantabria -9,6 5,3 6,0 2021 Spain Castilla y León -10,0 5,0 6,5 Castilla-la-Mancha -9,0 4,4 6,2 Cataluña -11,2 5,9 7,2 Extremadura -9,2 4,2 7,0 Galicia -9,7 5,7 6,4 Madrid -10,8 4,7 7,4 Murcia -10,0 5,5 6,6 Navarra -10,6 5,6 7,3 País Vasco -10,5 5,3 7,5 La Rioja -10,2 5,1 6,5 Valencia -10,7 5,9 6,6 España -11,0 5,5 7,0 16 Fiscal Evolution in 2020

Non financial income, December 19/18 y 20/19 (interanual) Regional budget deficit / budget surplus (million of Euros, % of GDP). Baseline: 2010. December 2020

2020 CCAA EUR mill % GDP Andalucía 206 0.14 Aragón 58 0.17 Asturias 214 1 Islas Baleares 70 0.23 Islas Canarias 232 0.55 Cantabria 65 0.51 Castilla y León 24 0.41 Non financial expenses, December 19/18 y 20/19 (interanual) Castilla La Mancha 158 0.04 Cataluña -755 -0.35 Extremadura -33 -0.18 Galicia -46 -0.08 Madrid -117 -0.05 Murcia -328 -1.12 Navarra -180 -0.95 La Rioja 85 1.06 Valencia -1,206 -1.15 País Vasco -753 -1.12 España -2,306 -0.21

Source: Ministerio de Hacienda 17 Source: AFI Deficit target

The historical fiscal discipline of the Community of Madrid has allowed the region to register a better financial balance than the national average.

Fiscal situation of the regions according to AIReF fiscal authority

Deficit/Superavit 2020 GDP % Deficit/Superavit 2021 GDP %

Source: Deficit and Superavit forecasts of AIREF GDP % 18 Economic strengths of the region

The dynamic upturn of the economy in the 2nd semester, with a positive differential, particularly remarkable in 4Q. More compared resistance of the commercial distribution sector in 4Q and the whole 2020. Leadership in companies creation. A diversified productive structure with a wide presence of bigger companies. Good behavior in labor market. Highest % of students in higher education in Spain (47,8%). 1 out of 5 professionals in Spain works in Madrid (more than one million professionals) Further abroad opening of Madrid´s economy.

19 Tax comparison

The Community of Madrid's policy on regional taxes aims at a flexible tax regime that favors the creation of companies and economic dynamism. In this sense, Madrid applies bonuses / deductions on certain key taxes such as Patrimony, Patrimonial Transmissions or Documented Legal Acts, while maintaining tax collection at high levels thanks to the business-friendly ecosystem. It should be noted that the tax rates and deductions shown in the following table are of general application. However, the tax regulation establishes other deductions with a more residual application.

Source: Community of Madrid.

20 Financial System of the Community of Madrid

The budget of the Community of Madrid increased by 18.4% year- on-year in 2020, mainly due to fiscal growth. Billions (€) 2019 2020* % 20/19 % Total 20 State managed taxes 19,45 19,97 2,7% 85,9% PIT 10,60 11,07 4,4% 47,6% VAT 6,73 6,84 1,6% 29,4% Excise Duties 1,74 1,73 -0,6% 7,4% Excise Duties: Transport 0,21 0,16 -25,5% 0,7% Bank deposits tax 0,11 0,13 22,6% 0,6% Business Tax (local tax on business locations) 0,02 0,03 11,1% 0,1% Gambling Taxes 0,03 0,02 -25,7% 0,1% Enviromental Tax (regional taxe) 0,01 0,00 -100,0% 0,0% Community of Madrid managed taxes 2,30 1,84 -20,0% 7,9% Wealth Transfer Tax 1,16 0,83 -27,9% 3,6% I. over Documented Legal Acts 0,40 0,32 -20,2% 1,4% Inheritance and Gift Tax 0,51 0,50 -2,2% 2,1% I. over wealth 0,00 0,00 -36,4% 0,0% Madrid´s Tax on Gambling 0,14 0,11 -22,5% 0,5% Self-taxation on Gambling 0,00 0,00 -45,2% 0,5% Waste Collection Fees 0,00 0,00 -10,0% 0,0% Tariffs 0,09 0,07 -13,9% 0,3% Current Transfer -3,78 -0,57 84,9% -2,4% Rest of non-financial income 1,68 2,02 20,6% 8,7% Total of non-financial income 19,65 23,26 18,4% 100,0%

Source: Community of Madrid (Community of Madrid Budget) 21 Investment in R&D

Investment in R&D as % GDP 4,100.6 M investment in R&D (2019) (2019)

4.5 % of increase from previous year

26.3% of total Spanish spending in R&D (first region in expenditure)

Second region by investment as % GDP (1.71%), +46 basis points compared with the national average.

22 Madrid leads business creation in 2020

One on five companies created in Spain is created in the Community of Madrid (23.2%). In 2019, 21,791 new companies were created in the region. Capital subscribed of these new companies supposed 27.2% of national total.

Source: Community of Madrid 23 Madrid, preferred destination for foreign investment

In 2020, the Community of Madrid received an investment of 17,910 M€, 75% of the national total.

Is the region which invests more abroad, 12,956 M€, 56% of the investment issued by Spain.

24 Competitive advantages

Sector WeightsSector breakdown Weights breakdown of Spanish ofregions Spanish regions

Services

Wholesale & Public Retail Technical & Administration. commerce. Information & Finance & Scientific Defense. Social Art. Culture and Real Estate CCAA Farming Industry Construction vehicle repairs. Communication Insurance activities and Security. Entertainement. Total Services activities hospitality. activities activities auxiliary 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%).Even though the manufacturing sector might be the first one to recover from a de-escalation of the emergency state, in the medium term the COVID 19 crisis might trigger again geopolitical tensions and trade-wars which have less impact on the service sector. . Less weight than average in construction; a very labor intensive sector and very sensitive in terms of unemployment rates in recessions and stress scenarios. . Leader among other regions in activities that might actually have a ‘V-shaped’ recovery; information, communications, finance, IT, scientific activities, etc. 25 Competitive advantages

Madrid regionSectorregisters Weightsin 2019 breakdowna competitiveness of Spanishindex above, regionsnot only Spain but also above the EU countries. Additionally, Madrid´s airport (Adolfo Suárez Madrid-Barajas) ranks as the 1st Spanish airport and the 5th in Europe by the number of passengers and freight traffic. And nationally, Madrid is the epicenter of the national road and rail network due to a well developed public transport network which covers the whole region.

EU Regional Competitiveness Index (2019)

Source: European Comission. 26 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

II. FUNDING PROFILE Normative protection of Debt payment

The Comunidad de Madrid´s debt is included in the scope of State debt . Article 135 of the Constitution states ...

. ". Loans to meet payment on the interest and capital of the State’s Public Debt shall always be deemed to be included in budget expenditure and may not be subject to amendment or modification as long as they conform to the terms of issue.".

In terms of Organic Law Article 14.5 of the Law on Financing of the Autonomous Communities states: "The public debt of the autonomous communities and the securities of an equivalent nature issued by them shall be subject, to the same rules and shall enjoy the same benefits and conditions as the Public Debt of the State" .

Article 14 of the Organic Law 2/2012 of 27 April on Budgetary Stability and Financial Sustainability provides: "The payment of interest and principal on the debt of public administrations shall have absolute priority over any other expenses”

In practice, the Spanish Government has provided financial support to regions that have experienced budgetary difficulties or access to the financial market

 Since 2012 the Treasury has implemented mechanisms such as the FLA (Autonomous Liquidity Fund) and FFPP (Payment Provider Fund) to provide liquidity to the regional governments and local authorities to enable them to cope with their payment obligations (Royal Decree-Law 17/2014).Ultimately, the Government of Spain is the ultimate guarantor of debt amortization.

28 Debt ratios of the Community of Madrid

The Community of Madrid has strong credit fundamentals, putting it in a very favourable starting position to face the current economic and health crisis.

These debt ratios mean that the Community’s cost of financing is very favourable. As a result, the Community has opted for greater financial autonomy (similar to the strategy of the Foral Regions), having repaid early in 2020 all the outstanding capital concentrated in the FFCA (unlike other regions where more than 80% of its debt is state-funded). 2021 1Q Debt/GDP Debt (€ mill.) (%) Canarias 15.9 6,694 CA.País Vasco 16.4 10,924 Comunidad de Madrid 16.5 35,352 Comun. Foral Navarra 20,0 3,751 Galicia 20.4 11,738 La Rioja 20.9 1,656 Asturias 23.1 4,907 Andalucía 23.7 35,098 Castilla y León 24.3 12,983 Aragón 25.8 8,767 Cantabria 26.4 3,340 Extremadura 27.5 5,084 Baleares 29.9 9,008 Murcia 37.5 10,839 Cataluña 38,0 80,399 Castilla La Mancha 41,0 15,659 Comun. Valenciana 49.4 51,117 Media Nacional 27.7 307,316 Fuente: Bank of Spain and INE Source: Bank of Spain 29 Gross financing needs 2021

TOTAL 2021 FINANCIAL NEEDS: 3,090MM

TOTAL ISSUED 2020: 4,896MM

AMOUNTS (€ million) Source: Comunidad de Madrid 30 2021 Debt Strategy

1. Funding needs: EUR 3 bn

2. EUR Benchmarks transactions.

3. Preference for medium and long maturities.

4. Smoothen the maturity profile towards longer term financing.

5. Promote Sustainable Finance:

 Capacity to issue bonds and loans.  Public and private deals.  In complies with the GBP and SBP and aligned with the SDG.

31 Rating and debt ratios

Moody’s S&P DBRS

Current Rating Baa1 A- A- Outlook Stable Stable Stable Date 04/30/2020 10/23/2020 03/12/2021

Comunidad de Madrid National Total

2018 2019 2020 2021 1Q 2018 2019 2020 2021 1Q

Debt/GDP (%) 14.5 13.9 16.0 16.5 24.4 23.7 27.1 27.7 Debt 33,448 33,469 34,604 35,352 293,396 295,080 303,622 307,316 Comunidad de Madrid Public Tresury 2018 2019 2020 2021 1Q 2018 2019 2020 2021 1Q

Debt Average Cost (%) 2.16 2.19 1.91 1.84 2.42 2.21 1.87 1.80

LCR (Liquidity Coverage Requirement): NIVEL 1 EUROCLEAR.ECB 0% risk weighted. Minimum risk applicable in accordance with European Prudential Regulations

The cost of debt under control (July 2021) The average cost of Comunidad de Madrid is 1.88% The average cost of debt Spanish Treasury is 1.66% *

Source: Comunidad de Madrid, INE and Bank of Spain Considering rights and obligations *Cost: Spanish Treasury 32 The main characteristics of the debt

Distribution bonds/loans Loans Currency distribution Type % Public entities 23.70 Private entities 76.30 Total % Loans 40.61 Bonds Type % Euro 100.00 Foreign currency 0.00 Total % Bonds 59.39

Distribution fixed/variable Maturity Distribution

A commitment to fixed-rate issuances is a strength: - Reducing risks. - Reducing volatility when making payments.

Source: Comunidad de Madrid. (*) SEC 2010 *Public entities: European and Spanish (ICO) Financial Institutions Update: 31/12/2020 *Private entities, Private Banks 33 Funding Activity

Madrid, regular player in Capital Markets.

Source: Comunidad de Madrid 34 The main characteristics of the debt

Source: Comunidad de Madrid 35 Average cost and average life

% Years 4,5 8,5 8,33 3,96 3,90 8 4 3,82 7,67 3,61 3,53 7,39 7,5 3,5 6,92 6,96 6,85 7 2,79 3 2,43 6,5 6,17 6,41 2,5 2,27 2,21 2,19 6 5,5 5,51 1,91 2 5,34 5,5

1,5 5

*

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Average Cost Average Life

The average maturity of debt is 8.15 years (July 2021) 36 The average maturity of Spanish Treasury is 8.14 years (July 2021)

Source: Comunidad de Madrid Spanish Treasury 36 Comunidad de Madrid: Benchmark Transactions

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.

37 Source: Comunidad de Madrid 2021 Transactions

2021 Placements and Loans Operation € mill Settlement date Tenor Loan 250,000,000 03/05/2021 12 Loan 142,000.00 03/26/2021 10 Loan 50,000,000 03/30/2021 12 Loan 300,000,000 03/26/2021 12 Public Placement (Sustainable) 1000,000,000 03/26/2021 10 Private Placement 80,000,000 06/21/2021 30 Private Placement 50,000,000 06/30/2021 40 Loan (Health Social) 9,000,000 07/05/2021 13 Private Placement 50,000,000 07/30/2021 39 Total 1,931,000,000

• Moderate interest rate with “Contained financial costs”. • 10-40 years tenors executed. • The average Funding cost for 2021 is 0.521% and the average tenor is over 12.99 years.

Source: Comunidad de Madrid 38 €1bn 0.42% due 30th April 2031

5º Sustainable Public Deal

BY REGIONS BY INVESTOR TYPE

TOTAL AMOUNT 1,000,000,000 € • First public benchmark issued by any Spanish Regions in 2021. • Tightest level over SPGB ever printed in a syndicate deal by Comunidad de Madrid • 75% placed outside Spain • 69% ESG investors

Source: Comunidad de Madrid 39 2021 Bond Profile

BOND TRANSACTIONS

BY REGIONS BY INVESTOR TYPE

TOTAL AMOUNT 1,180,000,000 €

Source: Comunidad de Madrid 40 2020 Transactions

2020 Placements andAmount Loans Operation € mill. Settlement date Tenor Loan 345,000,000 01/30/2020 12 Loan 500,00,000 01/30/2020 10 Loan 86,000,000 01/31/2020 10 Loan 25,000,000 02/06/2020 25 Loan 250,000,000 01/31/2020 12 Loan 25,000,000 02/04/2020 30 Loan 50,000,000 01/31/2020 13 Loan 10,000,000 02/06/2020 46 Loan 140,000,000 02/07/2020 11 Public Placement (Sustainable) 1,250,000,000 02/27/2020 10 Loan 130,000,000 03/12/2020 9 Private Placement (Sustainable) 265,000,000 04/08/2020 30 Loan 20,000,000 04/20/2020 30 Public Placement (Green) 700,000,000 05/08/2020 7 Loan (Health Social) 140,000,000 05/29/2020 13 Private Placement (Health Social Bond) 52,000,000 05/29/2020 3 Loan 70,000,000 05/19/2020 12 Loan 100,000,000 06/08/2020 3 Loan (Health Social) 465,000,000 06/22/2020 15 Private Placement 297,000,000 09/22/2020 28 Private Placement 100,000,000 11/23/2020 29 Loan 50,000,000 11/20/2020 12 Private Placement 50,000,000 11/24/2020 32 Private Placement 40,000,000 11/25/2020 20 Loan (Health Social) 135,000,000 11/23/2020 15 Loan (Health Social) 51,000,000 25/11/2020 13 Total 4,896,000,000

• Moderate interest rate with “Contained financial costs”. • 10-46 years tenors executed. • The average Funding cost for 2020 is 0.64% and the average tenor is over 12.16 years.

Source: Comunidad de Madrid 41 €1.25bn 0.419% due 30th April 2030

4º Sustainable Public Deal

BY REGIONS BY INVESTOR TYPE

TOTAL AMOUNT 1,250,000,000 € • Lower rate in a pubic syndicated deal. • High quality order book with more than € 7 bn. • 80% placed outside Spain • 51% ESG investors

Source: Comunidad de Madrid 42 €700 bn 0.827% due 8th May 2027

1º Green Public Deal

BY REGIONS BY INVESTOR TYPE

TOTAL AMOUNT 700,000,000 € • First pubic syndicated green deal. • High quality order book with more than € 3.5 bn. • 61% placed outside Spain • 58% ESG investors

Source: Comunidad de Madrid 43 2020 Bond Profile

BOND TRANSACTIONS

BY REGIONS BY INVESTOR TYPE

TOTAL AMOUNT 2,754,000,000 €

Source: Comunidad de Madrid 44 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

III. SUSTAINABLE FINANCE Sustainability Mandate of Comunidad de Madrid

Comunidad de Madrid has the clear social and environmental mandate to meet the needs of its citizens. The Region is committed to integrate sustainable development and social responsibility in all its activities while playing a key role to promote sustainable development initiatives on the territory.

The 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. The community of 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.

Additionally, Comunidad de Madrid has an important environmental mandate. Almost 50% of the region area of the region is protected due to its environmental protection and conservation value. The geo-economic situation in Madrid creates the need to implement policies for pollution management and waste treatment in densely populated urban areas.

Regarding the latter, the region set out its Strategy for Sustainable Waste Management for the 2017-2024 period. In relation 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: modernisation of the taxi and bus fleets with greener vehicles, improvement of bicycle infrastructure, fiscal incentives for the transition towards greener technologies in private transportation • Industry: reduction of emissions from industrial activities, like NOX produced by cogeneration plants • Residential/commercial/institutional: use of clean fuels for domestic heating, improvements in energy efficiency, smart grids • Agriculture: sustainable management of forests, promotion and development of biomass energy

In the social category, there is a Strategy for Social Inclusion 2016/2021, within the framework of the Europe 2020 Strategy, which seeks to eradicate severe poverty from the region.

Source: Comunidad de Madrid 46 Rationale for Sustainable Financing

Comunidad de Madrid’ Addressing the social and Supporting the growth of a Sustainability Mandate environmental transition sustainable financial market

• Comunidad de Madrid devotes a • By issuing Sustainable Finance • Address the increasing demand substantial portion of its budget to Instruments, Comunidad de for more sustainable assets by social and environmental Madrid contributes to global, responsible investors spending EU and national social and • Diversify its investor base • Via the issuance of sustainable environmental objectives targeting SRI and dark green debt, Comunidad de Madrid • Contribution to the achievement investors, while fostering the contributes to its social and of UN Sustainable Development relationship with existing environmental policies and Goals (SDGs) investors actions • Achievement of sustainable • Contribution to the development • Alignment of the funding strategy growth for Comunidad de of a sustainable financial with the sustainability strategy Madrid’s citizens market

Comunidad de Madrid believes that Sustainable Finance Instruments are effective tools to channel investments to projects demonstrating environmental and social benefits

Source: Comunidad de Madrid 47 Sustainable Finance Framework

Alignment to the Standards Comunidad de Madrid Sustainable Finance Framework’s pillars

Comunidad de Madrid 1 • Sustainable Finance Instruments’ proceeds will be Sustainable Finance Framework Use of allocated to Eligible Expenditures with a clear social complies with: Proceeds and/or environmental benefit within the General Budget • ICMA Green Bond Principles1, Social Bond 2 2 • Carried out by the Committee of Selection, Monitoring Principles , Sustainability Project 3 and Evaluation that meets before the issuance of a Bond Guidelines Evaluation Sustainable Finance Instrument, in accordance with the 4 and Selection • LMA Green Loan Principles Eligibility and the Exclusionary Criteria 3 Management • Sustainable Finance Instruments’ proceeds will be of Proceeds managed in a portfolio approach

4 • Allocation and Impact reporting provided annually until Reporting full allocation of the Sustainable Finance Instruments’ proceeds

5 • Second Party Opinion (SPO) from Sustainalytics. External Comunidad de Madrid might hire an external party to Review audit the allocation of proceeds

Under the Green Finance Framework, Comunidad de Madrid can issue Sustainable Finance Instruments which include Green, Social, Sustainability bonds, thematic bonds, private placements and loans 1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/ Source: Comunidad de Madrid 2. https://www.icmagroup.org/green-social-and-sustainability-bonds/social-bond-principles-sbp/ 3. https://www.icmagroup.org/green-social-and-sustainability-bonds/sustainability-bond-guidelines-sbg/ 4. https://www.lma.eu.com/application/files/9115/4452/5458/741_LM_Green_Loan_Principles_Booklet_V8.pdf 48 Second Party Opinion by Sustainalytics¹

Use of Proceeds • By financing social housing, CdM directly supports Spain’s State Housing Plan • Comunidad de Madrid finances public education for all, and allocates resources to guarantee access to education for students in disadvantaged situations • The financing of the healthcare programme will facilitate the ongoing provision of quality healthcare services to the local population • Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies • The support provided to Madrid’s SMEs, will strengthen the competitiveness of SMEs and 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 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

1. The full Second Party Opinion is available at: http://www.comunidad.madrid/inversion/relacion-inversores/deuda-sostenible Source: Comunidad de Madrid 49 Use of proceeds: transparent and audited programs

Amount Program in the Eligible categories Brief category description in € million General Budget (2020)

• Provision of affordable housing and shelter to Affordable Housing 261B 113.3 disadvantaged populations

• Provision of education to the youth (including 232A / 322A,B,C,F / Education disadvantaged groups) and support of public 1,189.8 schools and universities 324M

• Support to Madrid’s Public Healthcare System Healthcare and financing of high impact medicines against 312A 2,928.1 rare diseases

• Fight against gender violence and promotion of equal opportunities • Integration, education and employment 232B / 231A,C,F,D,E programmes and financial assistance to / 232A,B,E / 241A,M Social Inclusion vulnerable groups at risk of social exclusion 261B / 322A,B,F / 3,180.3 • Universal accessibility to the public 422B / 431A / 433A / transportation system (reduced price ticked) 453N / 463A • Provision of goods and services to the elderly and the mentally and/or physically disabled • SMEs financing Economic Inclusion and SME 241A,M / 422B / 360.3 Financing • Employment promotion and advancement, 431A / 433A / 463A including people with distance to labour market • Waste management Climate Change and 422B / 453N / • Clean Transportation 700 Environmental Management 456A,N • Environmental conservation and biodiversity

Source: Comunidad de Madrid 50 Contribution to the UN SDGs

Comunidad de Madrid Sustainable Finance Framework contributes to the achievement of the EU 2030 Agenda for Sustainable Development

 Affordable Housing (Target 1.4)  Social Inclusion (Target 1.1 and 1.B)

 Healthcare (Target 3.8)

 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)

 Environmental conservation and biodiversity (15.1, 15.2)

Source: Comunidad de Madrid 51 Management of Proceeds

• An amount equivalent to the proceeds of the Sustainable Finance Instruments will be allocated to a mix of environmental and social projects and provision of service. All amounts can be traced back to Madrid’s General Budget for a specific fiscal year. • The use of revenue may include capital and operating expenditures of eligible project categories and programs, as well as indirect lending to projects such as grants for private and public organizations and consortiums for special purposes. Only Comunidad de Madrid’s own expenditures (net of EU grants, EIB loans, state grants or other revenues earmarked for specific purposes) are eligible. • Specific chapters of the relevant budgetary programs that will be excluded are: – Personnel expenditures (Chapter 1 of the budgetary programs), – Financing costs (Chapter 3 of the budgetary programs), – Contingency Funds (Chapter 5 of the budgetary programs), – Financial assets (Chapter 8 of the budgetary programs), except for art.87-89 - Indirect investments in projects such as grants for private and public companies and consortiums for relative framework purposes. – Financial liabilities (Chapter 9 of the budgetary programs) • It is possible to issue multiple Sustainable Finance Instruments as long as the total amount of funding does not exceed the amount of eligible programs in the annual budget. • The proceeds of sustainable finance instruments will be allocated to eligible programmes in the General Budget of Comunidad de Madrid, corresponding to the fiscal year of the Sustainable Finance Instrument issuance and, in case necessary, to the preceding fiscal year. • An external auditor will verify the amounts within one year from the date of the Sustainable Finance Instruments issuance. • Comunidad de Madrid ensures that the systems and processes as specified above meet their requirements over the lifetime of the instrument.

Source: Comunidad de Madrid 52 Projects List 2021

ELEGIBLE PROJECT NAMES SUM CATEGORY Social Housing Agency as an intermediate entity of the FEDER operating program of the Community of Madrid: Realojo Cañada Real and Río 9.068.225,00 Guadarrama. Acquisition of houses. Conservation and maintenance of inhabited social housing 2.585.000,00 Affordable Housing Urbanization of land designated for the construction of social housing 3.697.761,00 Construction of new social housing development 14.355.300,00 Reparation of uninhabited social housing for its second adjudication 4.790.000,00 Neighborhood Assistance Service of the Community of Madrid, ASIVECAM 982.057,00 Attention to certain students with specific needs for educational support 1.811.302,00 Book loaning program 49.997.776,00 Maintenance expenses in Secondary Education Centers of the Community of Madrid 14.000.000,00 Education Tutoring Program (support and academic reinforcement) 1.889.800,00 Trainig and awareness-raising for women in situations of social exclusion 144.499,00 Vocational training scholarships of higher degree 16.000.000,00 Educational compensation classrooms 707.594,00 High impact medications and orphan drugs (for uncommon diseases) 480.000.000,00 Collaboration with local entities 116.800,00 Health Collaboration with professional entities 110.000,00 Nursing Care Report 2.0 20.000,00 Collaboration with citizen entities 500.000,00 Drogodependientes mobile service and referral to treatment 1.238.102,00 Reduced cost of school menu 30.000.000,00 Assist beneficiaries of economic benefits recognized in ther PIA 206.000.000,00 Assist the beneficiaries of home help recognized in their PIA 66.000.000,00 Care for the eldery in centers 292.972.990,00 Subsidy for the user of public transportation in Madrid 302.777.633,00 Senior Centers 13.955.287,00 Comprehensive care in residential centers 4.576.872,00 Soup Kitchens 2.704.359,00 Attention in non-residential centers 6.600.338,00 Free transportation services to special education centers for students 5.561.417,00 Free school transport services for students with physical disabilities from early childhood, primary and secondary education centers 2.154.545,00 Social Inclusion Economic benefits for social integration of victims 300.000,00 Free lunch service for students in special education centers 2.949.474,00 Free school transportation service for students in shanty towns 982.851,00 Participation and integration centers 1.900.000,00 Volunteer School of the Community of Madrid 112.314,00 Housing First program 500.000,00 Center for people in situation of social exclusion 1.000.000,00 Network of volunteer information points (PIV) 69.320,00 Information and attention program, LGTBI 400.000,00 Minimum Insertion Income 168.626.480,00 Subsidies for integration projects linked to minimum insertion income 4.700.000,00 Cooperation for development subsidies 3.100.000,00 Pre-commercial public purchase 1.500.000,00 Economic Help for the promotion of technological sectors 2.500.000,00 Help for the promotion of technological Start-Ups 1.925.000,00 Inclusion and Aid to encourage the use of innovation services in small businesses. Check Innovation Program 1.500.000,00 SMEs Financing Aid for the industrial SECs for industry project 4.0 1.500.000,00 Aid to intermediary innovation entities 1.500.000,00 Financing for the management of household waste 7.032.256,00 Measures to promote efficient mobility 2.000.000,00 Measures of conservation of the protected natural areas of the community of Madrid 3.879.562,00 Climate Change Measures to protect and improve the environment 1.137.006,00 Conservation measures for green areas and preurban parks of the Community of Madrid 1.700.000,00 and Enviromental Assistance to non-profit entities with environmental purposes 500.000,00 Management Inventory of emissions. Study of contribution of sources. Study of impact quantification measures Strategy of Air Quality and Climate Change of the 142.279,00 Community of Madrid 2013-2020. Blue plan + Maintenance and support for the management for the air quality of the Community of Madrid 1.019.361,00 Subsidy for the user of public transportation in Madrid 700.000.000,00 TOTAL 2.447.793.560,00 53 Reporting Framework example: Sustainability Bond Allocation Reporting 2020

Comunidad de Madrid Sustainable Finance Allocation Reporting 2020

Eligible Sustainability Project Amount (EUR) Allocation of green funding Amount (EUR) Portfolio Affordable Housing € 47,483,682 Sustainability Bonds € 1,515,000,000.00 Education € 77,242,093 Healthcare € 471,736,604 Social inclusion € 1,368,461,766 Economic inclusion € 6,602,927 Environmental Management € 1,339,294

Eligible Sustainability Project € 1,972,866,366.03 Sustainability Funding € 1,515,000,000.00 Portfolio

% of Eligible Sustainable Project Portfolio allocated: 76.8%

% Sustainable net proceeds allocated: 100%

Source: Comunidad de Madrid

54 Impact Reporting Indicators

Comunidad de Madrid will report over the most important social and environmental impacts produced by the eligible programs, based on the impact indicators. The following is a sample of the indicators by category:

Eligible category Sample of impact indicators

Affordable housing Number of vulnerable individuals or families benefiting from subsidized housing

Number of supported special education centers Education Number of education programs or professional development aimed at young people in risk of exclusion

Healthcare Number of people with rare diseases who are provided access to adequate services and medication

Number of supported victims of domestic violence (in terms of housing, financial, and other) Social inclusion Number of individuals or families who benefit from social minimum income

Economic inclusion Number of SMEs that receive support for equipment and facilities and technological modernization

Number of electric vehicles acquired

Clean Transportation1 New points of electric vehicle recharge Annual GHG emission reduced/avoided

Waste Management Amount of recycled or composted waste (tons)

Environmental Area/Number of Protected Natural Parks and other areas with unique conservation value where there conservation and has been an intervention Biodiversity

1. Comunidad de Madrid may hire an external expert consultant to perform the impact reporting calculation of the indicators for this category Source: Comunidad de Madrid 55 Reporting Framework example: Sustainability Bond Impact Reporting 2020

Comunidad de Madrid Sustainability Bond Impact Reporting 2020 Project category Target population Allocation information Impact indicators Eligible Project SDG Target Group Allocated to sustainable Share of Total Category Budgetted amount Number of beneficiaries Other impact indicators Addressed (if applicable) bond (amount) Budget Financing

Unit of Additional number / unit of mEUR % Number measure Indicators measure Goal 1: No Poverty Number of Affordable Goal 11: Disadvantaged and Families with € 47,483,682.34 € 47,483,682.34 3.1% 181 social housing 200 Housing Sustainable underserved groups social housing units acquired Cities and Communities Number of students with 10,986 academic reinforcement Number of Number of Goal 4: Quality scholarships Education Youth, disadvantaged groups € 77,242,092.58 € 77,242,092.58 5.1% 320,927 vulnerable education professional 7,954 students training higher degree Number of public schools 1,447 (0-18 years) Number of people with a rare disease Number of Goal 3: Good Citizens (including being people Healthcare Health and Well-disadvantaged and € 471,736,604.00 € 471,736,604.00 31.1% 233 provided treatment 52,251 being underserved groups access to medication high services and impact adequate medication Number of individuals or families 33.000 families Number of benefiting of Goal 1: No individuals or social minimum Poverty Disadvantaged and families income Social inclusion € 1,368,461,765.99 € 910,595,499.96 60.1% 3,771,686 SDG 5: Gender underserved groups benefiting Number of equality from social victims of 3,422 benefits gender violence supported Number of 295 millions subsidized trips Goal 4: Quality education Number of Economic Goal 8: Decent SMEs and long-term SMEs that € 6,602,927.12 € 6,602,927.12 0.4% 107 inclusion work and unemployed received economic support growth Number of annual data for 1,414,137 air quality parameters Environmental Goal 13: € 1,339,294.00 € 1,339,294.00 0.1% management Number of Climate Action annual data 1,672,391 meteorological parameters

Total € 1,972,866,366.03 € 1,515,000,100.00 100.0% 4,093,134

*a: Eligible SDGs which are adressed by the financed *b: Signed/budgetted amount committed by the issuer for the portfolio or portfolio components eligible portfolio/project and fit to the choosen SBP for sustainable finance. (sub)category *d: Impact indicators *c: This is the share of the total portfolio cost that is financed by the issuer. Source: Comunidad de Madrid 56 Leadership in Sustainable Bonds

• First Spanish Region to issue Sustainable Bonds

• Largest Sustainable Bonds issued in Spain

• Ability to Issue Green, Social and Sustainable Bonds and Loans

• 5 Sustainable benchmark public bond issues since 2017

• 59% of Sustainable Bonds in Comunidad de Madrid’s annual issuance in 2020 (53% Sustainable Financing in 2020 total funding)

• Largest amount outstanding in Sustainable Bonds (5,803 MM)

• Transparent and public reporting on projects financed by 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 Sustainable Bond (Public) 1,000 03/26/2021 10

Source: Comunidad de Madrid 57 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

IV. GREEN BOND Inaugural Green Bond 2020: Use of Proceeds

Overview of the Green Use of Proceeds 2020

EU Eligible Budgetary Budget UN Main eligible expenditures Environmental Category Programme code SDGs Objectives

Waste Management: 16: Environment, • Measures to implement the Waste EU Objective 4: Local 456N Strategy of Comunidad de Madrid administration Circular 456B and territorial economy planning

Clean transportation: • Promote the manufacture and use of the electric vehicles and points of recharge EU Objective 1: Climate • Promote public transport services and 14: Transport, Climate Change change and modal shift towards public Social Housing & 453N Mitigation environmental transportation (e.g. railway, metro de Infrastructure 456B management Madrid, bus system) and soft mobility, support multimodal transport solutions and promote the use of bicycles

Environmental conservation: 16: Environment, EU Objective 6: • Management and restoration of Local protection and Protected Natural Parks and other administration 456A restoration of unique spaces with important and territorial biodiversity and conservation value planning ecosystems

Source: Comunidad de Madrid 4 59 Green Projects for the 2020 Inaugural Green Bond

Clean Transportation

• Comunidad de Madrid finances • Comunidad de Madrid supports • Comunidad de Madrid supports the maintenance and efficient mobility and new forms the decarbonization of the of urban mobility: the purchase Region’s public transport development of the fully- electrified Madrid’s metro of electric bicycles with pedal- • In 2020, EMT Madrid has assist systems, electric scooters approved a €39m investment for • Thanks to the Energy Saving and electric mopeds, as well as the purchase of 50 new electric Plan 2012-2017 and the current environmental vouchers for the buses and 15 electric micro- Energy Efficiency Plan, Metro use of zero-emission shared buses de Madrid – the public mobility services enterprise of the Madrid • Benefits will result in better air • This is in line with the company’ underground – has reduced strategy of gradually reducing quality in the region and will direct electricity consumption in efforts towards a decarbonization the fleet’s carbon emissions daily operations by 25% of transport

Comunidad de Madrid strongly supports the decarbonization of the Region’s public transport while have the clear guidelines to help to reduce pollutant and GHG (Greenhouse Gas) emissions and to increase the share of renewable energies in the overall consumption of the transport system

Source: Comunidad de Madrid 5 60 Green Projects for the 2020 Inaugural Green Bond

Waste Management

• The Regional Strategy defines a waste management model that responds to the needs of the Community of Madrid, taking into account environmental, social and economic aspects • The main objectives of the Strategy are as follows:  To prevent the generation of waste in the Community of Pinto light packaging sorting plant Madrid • Financing the optimally • Financing the policies to evaluate the air quality of the  Maximize the transformation of manage pollution and waste in Community of Madrid through waste into resources, applying dense urban areas while measurements of the the principles of the circular mobilizing resources towards concentrations of regulated air economy a circular economy quality pollutants and regulated  Encourage the use of Best • The financing of the total air quality pollutants and Available Techniques in waste amount of domestic waste meteorological parameters, with treatment treatment for several the aim of protecting people's  To define criteria for the municipalities in the region of health and the environment, establishment of the necessary Madrid as well as assistance for providing full information to infrastructures and for the correct the collection of such waste citizens and other competent management of waste in the from some municipalities administrations. Community of Madrid Comunidad de Madrid assumes all waste collection and treatment costs of municipalities with populations of less than 1,000, and 50 % of the costs of municipalities with populations of between 1,000 and 2,500. The regional strategy gives great attention to the Prevention Programme

Source: Comunidad de Madrid 6 61 Green Projects for the 2020 Inaugural Green Bond

Environmental Conservation

• The Region of Madrid plans, • Comunidad de Madrid finances coordinates and manages the the maintenance and • Financing of Non Profit Network of Centres for restorations of public Natural Organizations dedicated to the Environmental Education. Parks in the Region preservation, defense and These centres are located in recovery of the region’s natural • One of the them is the areas of natural interest or heritage and the prevention of Valdebernardo park, peri-urban areas of recreation within high- any losses in biodiversity park located at the eastern end density populations of the Valdebernardo • This is done through Non Profit • Activities carried out in these neighborhood, which covers Organisations whose purpose centres promote initiatives for 108 hectares and which offers a is among the aforementioned the protection and conservation variety of 180.540 trees and and carry out their activity of the environment, and numerous sports facilities and within the Region of Madrid sustainable management of children's areas natural resources

Comunidad de Madrid takes very seriously the mandate of protecting, restoring and enhancing green public areas, while contributing to the sustainable development of populations around Natural Parks

Source: Comunidad de Madrid 7 62 Region of Madrid Inaugural Green Bond

Final Terms and Conditions Transaction Highlights

th Baa1/A-/BBBu/AL (Sta/Pos/Sta/Pos) • On Tuesday April 28 2020, the Autonomous Community of Issue Ratings Moody’s/S&P/Fitch/DBRS Madrid successfully launched their first Green bond (EUR 700MM due 30th July 2027), following 5 days of OoO calls with RegS, Bearer Dematerialised (No sales into Format over 20 European ESG investors Canada) Ranking Senior, Unsecured • One day before, on April 27th mid-day the mandate was Size EUR 700MM announced together with IPTs of SPGB +28 bps. By the EoD, IoIs were over 1.8bn from 119 accounts. Maturity 30th July 2027 Settlement 8 May 2020 (T+7) • Given this extraordinary reception from investors, books Coupon 0.827% Fixed, Annual, Act/Act - Short first opened the next day at 9:00 am with a guidance of SPGB +25 bps area. Just 1 hour from book opening (10:00 am) an update Reoffer Price 100.001% (Yield 0.827%) was released, indicating books over €3 Bn (excl. JLMs) and Reoffer Spread SPGB (mid yield 0.637%) +19bps area revising Guidance to SPGB +22 bps area. At 11.10 CET a second Benchmark Ref SPGB 0.8 07/30/27 HR 98% update was released, setting the spread at SPGB +19 bps, with Listing AIAF Books exceeding € 3.5 Bn (excl JLMs) and going subject at 11.35 CET Min Denoms €1k+ €1k Bookrunners BBVA (B&D), CACIB, ING, Santander • At 12.15 pm Final Terms were announced, setting the size at ISIN ES0000101966 €700 Mill. The landing Pricing level of SPG +19 bps shows a tightening of – 6 bps vs. Guidance (-11 bps vs IPTs) and is Flat vs BENELUX the Issuer Secondary curve (No NIP) CB REST 5% 3% 1% • The total demand for the deal exceeded 3.5bn from 172 INS & PF GBR 5% investors. Comunidad de Madrid managed to print a very 18% SWI FUND ITA 3% DEU successful deal (4.1x oversubscription) in a very challenging 7% 40% 41% environment due to the COVID 19 crisis at Zero New Issue Investor Type FRA 7% Geography Premium, thanks to the high oversubscription facilitated by the Green Bond category NOR 7% • The excellent quality of the book was reflected in the strong BANKS 37% ESP demand from dedicated ESG investors (64%), international 26% accounts (61%), and real money investors (58% from Investment & Pension Funds and Insurance Companies). 63 Highlights of the 2020 Madrid’s Inaugural Green Bond

• First Green bond issued by a Spanish Region

• Comunidad de Madrid has a strong and unanimous commitment to climate change mitigation and environmental protection. The transition to a low-carbon development model that has no way back, and the region wants to be at the forefront

• Our inaugural green bond is a clear sign of the region’s commitment to promote the ESG bond market and sustainable investments

• Climate change and environmental management is the green bond category in focus in the debut green bond of Comunidad de Madrid. The proceeds of the bond have been allocated to expenditures in clean transportation, sustainable waste management and environmental conservation

• Great execution metrics: 4.1x oversubscription after receiving EUR3.5bn of investor’s orders

• Strong demand from dedicated ESG investors

Source: Comunidad de Madrid 9 64 Inaugural Green Bond 2020: Impacts

Overview of the Green Use of Proceeds Impact Indicators Allocated Allocated Emissions Vehicles Managed Data Samples Number of Intervened Projects Main Eligible expenditures UN SDGs Amount Subcategories Amount (EUR Avoided Subsidize Waste (tn) Collected Programmes Surface (ha) Selected (EUR m) m) (tCO2) d Domestic Waste 5.2 284,297.1 Waste Management 5.9 Maintenance of the Management 0.7 1,466,702.0 Air Quality Network EMT Bus 68.0 2,939.7 - Intercity Bus 91 18,642.8 - Metro 387.8 90,147.8 - Clean 683.6 Measures for the Transportation Promotion of 3 - 2,300.0 Sustainable Mobility

Light Train 133.8 4,330.7 -

Environmental 1.3 15.0 Education Conservation of Protected Natural 3.7 118,527.0 Areas Connectivity through 3.8 581.0 Green Infrastructure

Environmental Protection of 10.4 0.2 13.0 Conservation Wetlands

Recovery and improvement of 0.9 210.0 private forest areas

Grants to NPOs with Environmental 0.5 11.0 Purposes 700.0 700.0

65 Inaugural Green Bond 2020: Impacts in the Region’s Public Transport

• Metro: the equivalent distance travelled by car would have caused 314,801 tCO2 emissions

• EMT bus: the equivalent distance travelled by car would have caused 5,558 tCO2 emissions. Investments included the acquisition of 50 electric buses for a sum of EUR 35m

• Intercity bus: the equivalent distance travelled by car would have caused 45,231 tCO2 emissions. Investments included the acquisition of 12 hybrid buses for a sum of EUR 8.4m

• Light trains: the equivalent distance travelled by car would have caused 5,157 tCO2 emissions

Emissions avoided by Clean Transportation initiatives funded by the Green Bond proceeds are equivalent to in excess of those of 95,900 passenger vehicles per year*

2020 Emissions Avoided (tCO2): 237,381.66

*http://calcarbono.servicios4.aragon.es/index.html 66 Impact calculated based on a reference travel distance of 15,000 km per year by a typical diesel car Case Study: Arco Verde

• Arco Verde is a project aimed at bringing nature closer to the metropolitan areas of the region, favouring its use and enjoyment without the need of using private vehicles, thanks to its connection with the existing transportation network

• By planting new trees and bringing nature closer to the city for immediate public use, 3.4 million tonnes of CO2 will be avoided, supporting the region’s fight against climate change • Promotion of behaviours which are respectful with nature and a sustainable use of the environment, through interactive programmes carried out by the Environmental Education Centres around the Arco Verde

• It will also benefit the region by setting a new guideline in the territorial and urban development of the metropolitan area of Madrid

• Some figures o 540,000 native trees and shrubs planted

o More than 200 km of refurbished paths and roads

o 25 new biodiversity areas o 26 municipalities benefitting from it

o 30 forest spaces and 5,000 ha of green and natural spaces connected

o 3,837,638 euros invested in 2020

67 Case Study: Plan APARCA+T

• This is an ambitious plan, which aims to promote the use of park and ride facilities in the region, unifying their management from the Regional Transport Consortium, providing the existing network with a homogeneous image and conditions of use, expanding this network with new spaces and facilities to reach more than 90 parking lots with a supply of around 50,000 spaces • The added value of the plan consists of a series of service improvements: 1. Free parking for intermodal users, i.e. those who use the parking lots to continue their journey by public transport, and for whom the Community of Madrid will assume the costs of this free parking 2. Increase in the supply of places 3. The integrated management of parking lots from the Madrid Regional Transport Consortium, through a management platform, which will allow the transfer of data and images to CITRAM, which in turn allows real-time management of information on available parking spaces, incident management, obtaining demand data, etc. 4. Development of an App for direct access to the Network's parking lots after user registration and direct exit once the Public Transport Card has been validated against the cell phone 5. In more advanced stages, the incorporation of dynamic information systems in the access corridors to Madrid, which together with the App, will inform users in real time of the location of the parking lots and the best route to access them; the degree of occupancy and the number of free spaces, frequencies and schedules of the modes of transport associated with the parking lot, etc. 6. Other associated services such as the installation of electric recharging points, reservation of places for carsharing, car rental by the hour, motosharing, bicycle loan systems, workshops, ATMs... • The Plan is a long-term plan, lasting 12 years, which includes 3 Phases (designed to achieve a homogeneous temporal development of the supply of parking spaces integrated in the system); 1. First Phase (2022-2024): Estimated investments of around 75 million euros (tender budget including VAT) in 25 parking lots and 16,760 parking spaces, of which some 6,000 are new 2. Second Phase (2025/2027): Investments have been estimated at around 65 million euros (tender budget including VAT) in 33 parking lots (29 identified and 4 under study) and 15,020 parking spaces 3. Third phase (2028/2030), it is planned to invest some 61 million euros (tender budget including VAT) in 33 parking lots (30 identified and 3 under study) with 14,360 spaces. • The APARCA+T park-and-ride network would therefore consist of 91 parking lots and an investment of more than 200 million €. • A pilot project has been developed for the implementation of a Technological Platform for the integration and management of the APARCA+T Network: Colmenar Vejo parking lot (the first parking lot to be integrated into the Network) . Inaugurated on January 13, 2020 and is operating normally, with the exception of the large decrease in the use of the parking lot due to the pandemic. As contemplated in the Agreement, the pilot test was carried out during 2020. . Occupancy data, since February 2020, an average of 1,195 users per month and total of 13,146 users in the first 11 months of the service (adding those who validate from the app and through the ATM). Data was strongly influenced by mobility restrictions due to the pandemic. 68 Clean Transportation Calculation Methodology

1.- METHODOLOGICAL BASES EEE = CEE x FECO2_EE The methodology developed and the emission factors applied are based on the Where: EEE = CO2 emissions from electricity consumption (t CO2). following references: CEE= Electrical Energy Consumption (kWh). 1. EMEP/EEA Air pollutant emission inventory guidebook - 2019. FECO2_EE = CO2 emission factor associated with electricity consumption 2. IPCC Guidelines for National Greenhouse Gas Inventories, (t CO2/kWh). 2006 Intergovernmental Panel on Climate Change Guidelines for National Greenhouse Gas Inventories (hereafter 2006 In order to quantify the emissions avoided by regular public passenger transport, it is IPPC). taken into account that the demand for travel would be satisfied by the use of private 3. National Inventory of Emissions to the Atmosphere of Spain of vehicles. The calculations of avoided emissions are made considering that the the Ministry of Agriculture and Fisheries, Food and passenger-km traveled by CRTM buses in a given year are in turn traveled by Environment. passenger vehicles and with an average occupancy rate. Passenger-km traveled is the result of adding the product of the length of an average The methodology used is based on that proposed in the European Environment trip (km) and the number of passengers. The calculation equations are analogous to Agency's technical report COPERT IV (Computer Program to Calculate those used to estimate bus fleet emissions, but in this case using DEFRA 2020 Emissions from Road Transport), which is used as a reference in the factors. EMEP/EEA and IPCC guidelines. This methodology is based on the application of emission factors by type of vehicle and according to different speeds, as well 2.- YEAR OF CALCULATION: 2020 as other estimation algorithms. 3.- SCOPE: In the case of direct emissions from urban and interurban bus fleets, diesel Road modes: hybrid buses and natural gas hybrid buses have been included. - EMT of Madrid (hybrid and pure electric vehicles) - Road concessions in the rest of the Community of Madrid (hybrid and pure According to the COPERT methodology, CO2 emissions are included within the electric vehicles) Group 2 pollutants in terms of the calculation approach, where emissions are Railway modes: estimated from fuel consumption using the emission factors by pollutant and - Metro de Madrid (Subway) vehicle type, published in the National Emissions Inventory. The calculation - Railway concessions algorithm is as follows: 4.- ACTIVITY DATA E_(CO2,k)=〖FE〗_(CO2,k) x〖Cons〗_k Road modes: where: - Vehicle characteristics (Euro standard, fuel type) ECO2,k = CO2 emissions per vehicle type k. - Fuel/electrical energy consumption of vehicle fleets o Kms traveled per year Consk = Fuel consumption by vehicle type k. Railway modes: Electrical energy consumption for traction and auxiliary installations FECO2,k = CO2 emission factor, for vehicle class k. 5.- EMISSION FACTORS Therefore, the activity data used is the fuel consumption or otherwise the km - CO2 emission factors and density and PCI parameters for fossil fuels and traveled, estimating in this case the fuel consumption based on the consumption electricity published by the Spanish Climate Change Office (OECC), factors [g fuel/km] for each type of vehicle k for the speed considered. available 2019 to date - COPERT consumption factors per KM (EMEP/EEA 2019 Guidelines). The emission factors used are those published by the Spanish Climate Change - DEFRA 2020 factors (private vehicle emissions) Office (OECC), with those for 2019 being those available to date. 6.- AUTHORS OF THE CALCULATION The estimation of indirect emissions associated with electricity consumption is CRTM with the collaboration of NOVOTEC Consultants in the Calculation of Emissions carried out taking into account the emission factor of the retailer that supplies from road concession buses in the rest of the Community of Madrid, based on its own electricity to each home. These emission factors are those published by the data (supply and demand) and activity data (fuel/electrical energy Comisión Nacional de los Mercados y las Competencias, being the 2019 factors consumption) provided by the corresponding operators. 69 those available to date. The calculation algorithm is as follows: Thanks you for your attention

Contact Information

Rodrigo Robledo Tobar Director General for Financial Policy and Treasury

Mª Luz García Aliaga Deputy Director Financial Policy

Beatriz Mula Coso Head of Funding

[email protected] http://www.comunidad.madrid/inversion/relacion-inversores Disclaimer

• This presentation was created by the Comunidad de Madrid • This presentation does not constitute an offer or invitation (by or on behalf of) the Comunidad de Madrid to the subscription or purchase of securities issued by the Comunidad de Madrid. • This presentation is not intended to provide any assessment of the financial situation of the Comunidad de Madrid or any assessment of the instruments used by the Comunidad de Madrid and should not be considered as a recommendation from the Comunidad de Madrid. Each recipient of this presentation, independently, should judge the relevance of the information contained in this document, make their own assessment and determine whether additional information should be sought and consult their own advisors in terms of legal, fiscal, or another type that is deemed necessary.

70 70 CONSEJERÍA DE HACIENDA Y FUNCIÓN PÚBLICA

ANNEXES Overview of outstanding Sustainable transactions Amount Settlement Maturity Tenor (€ million) Social Bond (PP) 48 08/18/2016 08/18/2031 15 Social Loan 20 11/08/2016 11/08/2026 10 Sustainable Bond (Public) 700 04/18/2017 04/30/2022 5 Sustainable Loan 240 06/28/2017 06/28/2032 10 Sustainable Bond (Public) 1000 02/23/2018 04/30/2028 10 Sustainable Loan 39 02/05/2018 02/05/2028 10 Sustainable Loan 340 01/29/2018 01/29/2032 10 Sustainable Bond (PP) 150 10/22/2018 10/22/2058 40 Sustainable Bond (Public) 1250 02/14/2019 04/30/2029 10 Sustainable Loan 50 03/14/2019 03/14/2030 11 Sustainable Loan 97 03/15/2019 03/15/2029 10 Sustainable Loan (Blookchain) 220 03/29/2019 03/29/2030 11 Sustainable Loan 53 04/05/2019 04/05/2029 10 Sustainable Bond (PP) 50 04/25/2019 10/22/2058 40 Sustainable Bond (Public) 1250 02/27/2020 04/30/2030 10 Sustainable Bond (PP) 265 04/08/2020 10/31/2050 30 Green Bond 700 05/08/2020 07/30/2027 7

Source: Comunidad de Madrid 72 Debt issuance Procedure: Public issue (I)

Source: Comunidad de Madrid

73 Debt Issuance Procedure. Private placement or retap (II)

Source: Comunidad de Madrid 74 Affordable 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.

By financing affordable housing, Comunidad de Madrid directly supports Spain’s State Housing Plan

Source: Comunidad de Madrid 75 Education

Use of proceeds : Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at providing educational programs and vocational training to youth, as well as allowing for a successful integration of disadvantaged groups in the education system, preparing them for future labor market opportunities.

Eligible expenditures include: • Construction, rehabilitation and maintenance of public education schools; • Construction, rehabilitation and maintenance of public education centers; • Acquisition of equipment to ensure a quality education in public education schools; • Financing expenses related to home educational support service (SAED), hospital classrooms (AAHH) and therapeutic educational centers (CET); • Financing educational programs and vocational training for young people at risk of exclusion or unemployed; • Collaboration to support the integration of students with special educational needs; • Expenses related to subsidized school transport services; • Financing the development and maintenance of public universities; • Providing financial support to university students, based on socioeconomic criteria such as income level and patrimony, or disabilities.

Comunidad de Madrid finances public education for all, and devolves particular attention to allocate resources to guarantee access to education for disadvantaged students

Source: Comunidad de Madrid 76 Healthcare

Use of proceeds: Proceeds of the Sustainable Finance Instruments will be allocated to projects aimed at providing a modern and sustainable public healthcare service system to the citizens of Madrid (including, but not limited to, vulnerable groups).

Eligible expenditures include:

• Development, maintenance and modernization facilities integrated in the public healthcare service system (hospitals, health-care centers, mental health facilities, etc.); • Provision of health care or social services in underdeveloped areas or vulnerable populations; • Acquisition of medical equipment or provision of diagnostic services; • Financing programs for the promotion of health; • Financing activities to prevent and treat drug addiction. Expenditures related financing to healthcare aimed at fighting COVID-19 in the Madrid’s Region can be used for the purpose of the issuance of thematic social bonds.

The financing of the healthcare programme will facilitate the ongoing provision of quality healthcare services to the local population, including, but not solely, to the disadvantaged groups

Source: Comunidad de Madrid

77 Social 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 public transportation system; • Support to the elderly; • Support to the mentally and/or physically disabled.

Comunidad de Madrid supports social cohesion and inclusion, protection of children and women, and care for the elderly and incapacitated via its measures and policies

Source: Comunidad de Madrid

78 Economic 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 advising to commercial SMEs to help them improve their skills and business; • Support SMEs in the Handicraft and Artisan Market to improve their competitiveness.

The support provided to Madrid’s SMEs, will strengthen the competitiveness of SMEs and leading to the creation and preservation of jobs, and promote the integration of vulnerable people

Source: Comunidad de Madrid

79 Climate 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 80