“I am very pleased that the collaborative efforts that have gone into this project have enabled us to now present Sweden’s sovereign green bond, which combines low risk with a dark green stamp of approval,” says Hans Lindblad, Director General of the Debt Office.
As mentioned in previous reports, the green bond will be issued in domestic currency (SEK) and under the Debt Office’s programme for Euro Medium Term Notes (EMTN). The maturity will be set within the range of 7–10 years. Riksgälden is targeting an issue volute of approximately SEK20 billion. Barclays, Danske Bank, NatWest Markets, SEB and Swedbank are joint lead managers of the transaction. SEB also acts as structuring advisor for the green bond.
“This is the first time Sweden issues a green bond, and the ambition of attracting SEK 20bn makes it the largest green bond in Swedish kronor ever,” Lars Mac Key, responsible for sustainable bonds at Danske Bank, commented on this occasion. “What differentiates this green bond from other bonds is that investors can follow what government expenditure the bond is linked to and what environmental and climate effects the financing contributes to,” says Lars Mac Key.
The Swedish government’s green bond framework was reviewed by CICERO Shades of Green and was rated “dark green”. “The majority of funds in the first round of allocations are planned for clean transportation, with a focus on maintenance and operation of electrified railways,” Cicero noted. “Most direct fossil fuel projects are excluded, including diesel trains. Since 20% of the Swedish railway tracks are not electrified, there could however be investments that indirectly support diesel-driven railways. Sweden has a comprehensive and transparent regime for selecting and reporting on environmental targets with good use being made of independent oversight and advice,” Cicero added.
Image courtesy of Riksgälden