Kommuninvest, the Swedish local government debt office (rated AAA/Aaa, both stable), has requested Bank of America Merrill Lynch, Crédit Agricole CIB and SEB to arrange a series of fixed income investor meetings in Europe and North America over the coming weeks to introduce its Green Bond Framework. An inaugural Green Bond transaction may follow subject to market conditions.
Comment from Anders Gånge, Head of Funding & Treasury:
– We are very excited about the prospects for adding Green Bonds to our funding program. The Green Bonds/Green Loans concept is a compelling one, as it enables us to further diversify our funding and expand the investor base while also offering our clients, Swedish local governments, a loan product that supports the transition to a more sustainable economy and society.
Kommuninvest introduced Green Loans to clients during 2015. By year-end, 11 projects and more than SEK 5 billion in committed funding had been approved.
The first borrower to receive a Green Loan approval was Eskilstuna municipality, for the construction of four new wind turbines outside the city of Sollefteå. Other projects that have received Green Loan financing from Kommuninvest include the Herresta School in Järfälla municipality, Sweden’s first school built entirely in massive wood; the bio-fuelled combined power and heating plant Heden in Karlstad; the Trelleborg-Malmö regional train line; and the wastewater treatment plant Sobacken in Borås.
Eligible projects are Swedish local government investment projects in the fields of Renewable energy, Energy efficiency, Green buildings, Public transportation, Waste management, Water management, Adaptation measures and Environmental management.
Kommuninvest sees increasing demand for its Green Loans and expect that the Green Loan portfolio will grow, given the pace of public sector investment targeting renewable energy, green buildings and energy efficiency. In aggregate, Swedish local governments invest more than SEK 100 billion (USD ~12 billion) annually, equivalent to around 3 percent of GDP. Kommuninvest expects to complete between USD 15-17 billion in funding during 2016.
Information about the Kommuninvest Green Bond Framework:
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, 272 municipalities and 8 counties/regions are members of this voluntary cooperation. With total assets of around SEK 350 billion (USD ~40 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.
Björn Bergstrand, Senior Investor Relations Manager / Head of Media Relations, Kommuninvest I Sverige AB, tel: +46 (0)70-886 94 76, email: email@example.com