Kommuninvest strengthens its position

Major investments in the Swedish local government sector increase external loan financing needs. In 2019, the local government borrowing grew by SEK 65 billion to SEK 721 (656)¹ billion. Kommuninvest continues to strengthen its position, with the Company financing 56 (54) percent of the local government sector’s total debt.

The combination of extensive renovation needs for homes and properties built in 1965–1975 and strong population growth, requiring additional operational premises and expanded infrastructure, is driving up the local government sector’s investment volumes. These investments encompass several areas of local government responsibility, including property, housing, water and sewerage, infrastructure and energy production.

Over the past three years, the local government sector’s favourable results and strong cash flows have reduced the need for external financing of the investments carried out. In 2018, net profit fell to the level of 2015 and decreased further at the end of 2019. This has led to an increased need for external financing as no decline in investment needs can be discerned.

Kommuninvest grew strongly in the years following the financial crisis and has increased its market share further in recent years, from 44 percent in 2013 to 56 percent in 2019. Funding via the banking sector and bilateral parties has reduced to 14 (15) percent. As recently as 2013, the banks accounted for a third of the lending to Sweden’s municipalities and regions. At that time, Kommuninvest was the largest individual lender with a market share of slightly more than 43 percent. About 20 municipalities and about ten municipal companies are currently active in the capital market. In 2019, issues of local government bonds and commercial papers accounted for 30 (31) percent of the sector’s funding.

During the period 2013–2019, the sector’s borrowing grew by an average 7 percent while, during the same period, Kommuninvest grew by an average 12 percent. Growth in the banking sector’s lending to the local government sector was negative during that period, averaging negative 6 percent.

1) Forecast based on Kommuninvest’s ongoing monitoring of debt and
investment trends in the Swedish local government sector. At the
time of publication of this Annual Report, neither the complete data
for 2019, nor the municipalities’ and regions’ own annual reports
were a vailable. V alues and s hares f or 2 018 h ave b een a djusted i n
accordance with the municipalities’ and regions’ own annual reports.


Forms of local government funding

Swedish municipalities and regions have access to three main sources of loan financing:

  • funding via Kommuninvest
  • funding via the bank sector or other bilateral parties
  • funding via the money and bond markets

The local government sector’s borrowing debt and forms of financing


The local government sector’s funding over the past decade is characterised by an increased proportion of funding via Kommuninvest and proprietary funding programmes, as well as a reduction in funding via the banking sector. Data for 2019 are based on estimated total debt.