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    Reykjavik Energy Taps Long Term Green Bonds

    Stockholm (NordSIP) – Orkuveita Reykjavikur (OR; Reykjavik Energy) issued ISK2.34 billion (US$18.33 million) via two series of green bonds maturing in 2034 and 2055. The transaction attracted a total of ISK3 billion worth of bids.

    The bonds pay a fixed real interest rate with a semiannual annuity amortisation schedule. The 14-year bond attracted bids amounting to ISK900 million and accepted ISK600 million. It priced at a 1.32% yield, at the low end of its initial range of 1.31%-1.35%. The green bond series with a 25-year residual maturity attracted bids amounting to ISK 2.1 billion at a yield of 1.38%-1.43%. OR accepted bids amounting to ISK 1.74 billion at a yield of 1.40%. Following this transaction, the 2034 and the 2055 series have ISK17.911 billion outstanding. Fossar Markets managed the process on behalf of OR. The green bond series will list on the Nasdaq Iceland Sustainable Bond market.

    The use of proceeds from these securities is governed by OR’s green bond framework, according to which the funds will go towards eight types of investments, including renewable energy, clean transportation and carbon capture and storage, among others. All in all, the projects covered can be mapped onto eight of the UN Sustainable Development Goals (SDGs), including Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Industry, Innovation and Infrastructure (SDG 9), Sustainable Cities and Communities (SDG 11), Responsible Consumption (SDG 12), Climate Action (SDG 13), Life below Water (SDG 14) and Life and Land (SDG 15). According to CICERO Shades of Green, OR’s green bond framework rates as Dark Green, the highest rating available. The second-opinion provider argues that “the governance procedures in OR’s framework to be Excellent.”

    In recent news, Reykjavik Energy listed on the Nasdaq Sustainable Bond Network (NSBN), at the end of January. The goal of NSBN is to offer investors access to information about sustainable, green and social bond issuers for investment due diligence, selection and monitoring. As demand for these asset classes continues to grow, the network allows investors to connect and compare sustainable bonds across regions, evaluate opinions on green bond frameworks and access aggregated documentation in a centralized, public platform.

    Image by Sharon Ang from Pixabay

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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