Stockholm (NordSIP) – On June 27th, Kommuninvest, Sweden’s agency for municipalities’ funding, published new terms for Green loans and an updated Green Bonds Framework, the fourth such update since its inception in 2015. The new loan terms enter into force on 1 December 2024, while the Green Bonds Framework is applicable from 27 June 2024.
The review process underlying these new criteria relied on contributions from customers and members of Kommuninvest, as well as industry players such as Energiföretagen Sverige, Svenskt Vatten and Allmännytta Sverige. The goal was to draft a balanced proposal that provides additional support for transition work at municipal and regional levels, with the EU taxonomy as an increasingly central starting point and with green financing criteria that can work in practice.
Kommuninvest last came to the market with a green bond on June 11th, when it issued SEK 4.5 billion in 7-year green bonds. This was its second green bond transaction of the year.
New Green Loans Terms
Green Loan terms for all eight project categories in the framework have been reviewed. For the project categories Green buildings, Renewable energy and Water management, which correspond to over 90 percent of the Green Loan portfolio, the new terms comply with the EU taxonomy technical screening criteria on significant contribution to at least one EU environmental goal. For other project categories, the criteria are adapted to work in a Swedish municipal context. A summary of the changes category by category can be downloaded below.
“Extensive environmental and climate investments have driven the strong development so far for our green financing. Looking at both regulations and market development, it is natural that ambitions are raised over time. At the same time, it is important with loan criteria that work for our customers. We trust that the design of the updated framework will promote continued high use of green financing and good quality in the transition work,” says David Ljung, Head of Lending and Advisory at Kommuninvest.
Updated Green Bonds Framework
The 2024 Framework update, is the most extensive update to date. Kommuninvest has decided on a gradual taxonomy alignment as a reasonable way forward given developments, including the advent of the EU taxonomy and a European Green Bonds Standard. All project categories where it is deemed feasible and reasonable should comply with the EU Taxonomy “substantial contribution” criteria.
“Through its green financing program, Kommuninvest wants to support Sweden’s municipalities and regions in their transition work. We are now raising our ambitions in order to keep pace with EU regulatory developments and better be able to support the higher environmental and climate ambitions of our members and customers,” Björn Bergstrand, Head of Sustainability at Kommuninvest, said on this occasion.
