Cyprus hires banks for first ever sustainable bond - lead manager

March 27 (Reuters) - Cyprus hired banks on Monday to market its first ever sustainable bond, according to a lead manager memo seen by Reuters.

The country is set to join a flurry of European governments that have launched dedicated programmes to sell billions of euros of debt funding environmentally beneficial projects as investor demand for such assets has surged.

Cyprus's funding team will hold an investor call on Tuesday followed by investor meetings on Wednesday and Thursday, according to the memo.

The bond sale will follow subject to market conditions, the memo said.

Sustainable bonds are a broader form of environmental, social, and governance-focused (ESG) debt, of which proceeds can be spent on both green and social projects.

Most European governments have sold standalone green bonds.

But Cyprus follows a number of smaller countries including Slovenia and Luxembourg, which have opted for sustainable bonds as they often struggle to find enough projects to back standalone green bonds.

Reuters reported last year

that Cyprus would look to raise at least 500 million euros from its first issuance.

Cyprus has identified 1.06 billion euros of assets to fund through its sustainable bond programme, 83% of which are social projects and 17% green, according to an investor presentation seen by Reuters.

Barclays, HSBC, JPMorgan, Morgan Stanley and Societe Generale will manage the deal, according to the lead manager memo.