Sustainable financing and accessible knowledge

The global corona pandemic that impacted the world over the year presented new challenges for Sweden’s municipalities and regions. Although broad central government support has made a difference, the substantial investment needs and demographic challenges confronting the local government sector remain. The local government partnership that Kommuninvest represents, which enables competitive lending and access to financial expertise for efficient debt management, is more relevant than ever.

Focus of the operations
By providing efficient financing of investments for Sweden’s municipalities and regions, Kommuninvest shall contribute to sustainable welfare over the long term. Kommuninvest is owned by its members and the strong ownership structure, together with the joint and several guarantee from the members, gives it a unique position as a financial player, allowing capital to be raised cost-efficiently and stably in the financial market, thereby providing members with secure access to financing.

The sector’s challenges bring an increasing need for skills in debt management as part of sound financial management. Kommuninvest shall offer products and services in this area to contribute to the entire sector’s expertise in debt management. By extension, this shall provide elected representatives optimal room for manoeuvre in delivering welfare services to citizens.

Kommuninvest’s assignment also includes supporting the sector’s sustainability efforts, and steps were taken during the year to launch a new financial product focusing on social sustainability. Financing in this area shall promote social initiatives for increased security and safety, for example, improved housing environments or investments in health, education, sports and culture.

Over the year, Kommuninvest’s efforts to digitalise and streamline the administration of loan processing reached a milestone, with the final stage, the settlement of the transaction between the parties, now also being offered as a digital service. This enables Kommuninvest’s customers to complete all steps in the loan process with digital support.

During the year, Kommuninvest also launched a new web-based analysis tool that offers support in planning investments and cash flow. This tool makes it possible to generate liquidity forecasts for different time horizons and for different levels within the organisation, thereby constituting a strong addition to the services that Kommuninvest already offered.

Kommuninvest’s focus areas are the starting point for its operational governance.

Multi-year summary
The Company’s strong growth continues and total lending passed SEK 440 billion in 2020 – an average annual increase of 13 percent over the past five years. The Company’s share of the local government sector’s external borrowing has increased from 47 percent to an estimated 58 percent over the same period.

Accordingly, the Company’s equity has risen from SEK 6.5 billion in 2016 to SEK 8.7 billion in 2020. On 31 December 2020, the leverage ratio was 1.43 percent. For more information on the Company’s leverage ratio, see page 40.

The Company’s focus areas

Customer/Member
To be the customer’s/member’s first choice in local government finance management by adapting product and service offerings within all selected customer segments

Skills
To broaden and deepen employees’ competence to safeguard competitive operations in the future

Efficiency
The Company’s lending price, average funding cost plus various marginal supplements, are competitive in relation to the local government authorities’ proprietary funding

Digitalisation
To increase the organisation’s adaptability by improving working methods and platforms for development and innovation