Some 150 green investment projects financed by Kommuninvest green bonds contribute to reduce or avoid nearly 515,000 tonnes in annual carbon dioxide emissions, according to the issuer’s second green bonds impact report. This corresponds to emissions of approximately 350,000 cars with an annual mileage of 12,000 kilometres.
The Swedish local government funding agency has built up a portfolio of 146 eligible green projects in 80 Swedish cities and regions, with commitments totalling SEK 26.6 billion (USD 3.2 billion) and disbursements totalling SEK 19.9 billion (USD 2.4 billion) as of 31 December, 2017.
The Kommuninvest green bonds impact report provides investors and other stakeholders with impact information regarding Swedish local government investment projects financed under the Kommuninvest Green Bonds Framework by year-end 2017. Among the green projects financed are the new surgery center at the main hospital in Karlstad, the Ängen wastewater treatment facility in Lidköping, the ecological residential district Aspö Ekologi in Skövde and the Wisby high school premises on the island of Gotland.
Tomas Werngren, President and CEO of Kommuninvest, is a strong proponent of impact reporting a spart of a green finance programme.
- The opportunity for institutional investors and other stakeholders to receive information about funded projects and their expected environmental benefits are key in order to provide the end-investor, like a pension saver, with relevant information about his/hers savings. At a time when increasing emphasis is placed on the climate impact of mutual funds and pension funds, this is important.
Report highlights and impact results
- Three Kommuninvest Green Bonds issued in USD and SEK, totalling SEK 14.4 billion, of which SEK 14.4 billion was outstanding as of 31 December, 2017.
- 146 Green Bond Eligible Projects with disbursements totalling SEK 19.9 billion and commitments totalling SEK 26.6 billion at 31 December, 2017.
- Renewable energy: 39 renewable energy projects, totalling SEK 7.7 bn in disbursements (SEK 9.9 billion in commitments), are expected to result in 2.1 TWh of annual renewable energy generation capacity). This corresponds to the avoidance of 487,678 tonnes in annual CO2 emissions, or some 334,000cars removed from the road.
- Green buildings: 86 projects in green buildings, totalling SEK 9.8 billion in disbursements (SEK 12.7 bn in commitments), are expected to result in 26.3 GWh of reduced and/or avoided energy use, roughly equivalent to the energy requirements of ~240,000 m2 sq.m. of office space. This is expected in a reduction and/or avoidance of 3,693tonnes of CO2 emissions annually, or a fully loaded Volvo long-haul truck with trailer traveling 74 times around the earth.
- Energy efficiency in energy systems: Three projects, totaling SEK 0.2 bn in disbursements (SEK 0.2 bn in commitments) are expected to result in 110.8 GWh of reduced or avoided energy use, corresponding to the reduction/avoidance of 22,355tonnes CO2 emissions annually. (~5,000 Swedish citizens becoming completely carbon neutral). Projects are related to energy efficiency measures in local district heating systems.
- Water and wastewater management, public transport, waste management, and adaptation measures: 18 projects, totalling SEK 2.2 billion in disbursements (SEK 3.8 bn in commitments) with broadbased impact. The impact of these projects is broadbased. In water management, they include: reducing emissions of phosphorus, nitrogen and BOD emissions; modernising sludge treatment; reducing energy consumption in wastewater treatment; increased production of biogas.
Information to the editor
The Kommuninvest Green Bonds Impact Report, December 2017 is available for download as PDF, with project-by-project reporting also available in Excel at Kommuninvests impact reporting web page. Impact is calculated and reported in accordance with recommendations outlined in the Nordic position paper on Green Bonds impact reporting (Nordic Public Sector Issuers: Position Paper on Green Bonds Impact Reporting). The calculation of what the emission reductions mean in everyday terms has been done in cooperation with SEI, the Stockholm Environment Institute.
About the Kommuninvest Green Bonds Framework
Under its Green Bonds Framework, Kommuninvest provides lending to Swedish municipal investment projects in eight areas, including renewable energy, energy efficiency, green buildings, public transport, water management and waste management. By early April 2018 Kommuninvest had built up a green loan book committing SEK 27.1 million in green funding to 153 investment projects in over 80 Swedish municipalities and county councils/regions.
Kommuninvest expects to continue to grow its green loan portfolio, and to be able to be a frequent issuer of green bonds, in multiple currencies. Looking at the pace and direction of Swedish local government investment, Kommuninvest expects to grow its green lending portfolio from currently around 6 percent to 15-20 percent in a few years’ time.
Kommuninvest’s role as an aggregator and conduit issuer for cost-efficient funding of public sector investments has been recognized by the United Nations, which awarded Kommuninvest its United Nations ‘Momentum for Change’ Climate Solutions Award, in connection with the COP23 climate conference in Bonn, Germany, in 2017.
Kommuninvest is a municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. Together, we get better loan terms than each one individually. Since its inception in 1986, the Kommuninvest collaboration has helped lower the local government sector’s borrowing costs by many billion kronor. Currently, 288 municipalities and county councils/regions are members of this voluntary cooperation, out of a total of 310 Swedish local governments. With total assets of around SEK 360 billion (USD ~41 billion), Kommuninvest is the largest lender to the local government sector and the sixth largest credit institution in Sweden. The head office is located in Örebro.