Kommun Invest Green Bonds Impact Report, December 2018
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Kommun invest Green Bonds Impact Report, December 2018 Report on 227 Swedish local government investment GREEN LOANS GREEN BONDS projects financed by Kommun invest Green Bonds as of year-end 2018 At 31 December 2018, Kommun invest had disbursed a total of SEK 25.8 (19.9) billion, equivalent to USD 2.9/EUR 2.5 billion, in Green Loans to investment projects aligned with our Green Bond Framework. 25.8 20.4 This report presents the expected impacts of these projects, the governance SEK bn SEK bn process to verify and select them and the impact reporting methodology we apply. Unless otherwise indicated, the reported impact is Scope 1 and 2 accord Green Loan Ratio1: Green Bond Ratio2: ing to the Greenhouse Gas Protocol. Impact is reported for the aggregated portfolio of eligible assets as of 31 December 2018. 7.4 % 5.1 % Annual greenhouse gas (GHG) emissions savings tCO 662,390 2 tCO 29.7 2 Impact, tonnes CO2e per SEK mn (relevant to 85 % of Green Loan disbursements) 638,932 tCO2 avoided annual emissions3 23,458 tCO2 reduced annual emissions4 Energy savings in green buildings 3.0 TWh Annual renewable energy generation 33.9 GWh Whereof avoided energy use3 24.0 GWh Whereof reduced energy use4 9.8 GWh GWh 1) Total amount of Green Loans 110.8 divided by total loan portfolio. Energy savings from 2) Total amount of Green Bonds energy efficiency projects outstanding divided by total amount of debt outstanding. 3) Refers to a baseline/alterna- tive reference scenario. 4) Refers to a direct or absolute reduction in operation. 2 Kommun invest Green Bonds Impact Report 2018 Nordic Public Sector Issuers: Position Paper on Green Bonds Impact Reporting January 2019 Kommun invest reports its Green Bonds impact in accordance with the "Nordic Public Sector Issuers: Position Paper on Green Bonds Executive Summary Impact Reporting", published by a group of Nordic public sector green AS OF 31 DEC 2018 bond issuers. If we deviate from the Position Paper recommendations in our reporting, this will be indicated. GREEN BONDS ISSUANCE AND GREEN PROJECT PORTFOLIO SEKbn GREEN PROJECT PORTFOLIO DISTRIBUTION based on disbursed amounts Waste management 2015 2016 2017 2018 1 % Disbursed Green Loans USD 600m Green Bond (04/2019) Water Committed Green Loans SEK 5bn Green Bond (05/2020) management Renewable energy (not yet disbursed) USD 500m Green Bond (06/2021) 14 % 30 % SEK 3bn Green Bond (12/2021) SEK 3bn Green Bond (06/2023) Energy efficiency Clean 1 % transportation CO2 IMPACT AND GREEN INDICATORS 3 % based on outstanding disbursed amounts1 Green buildings Climate change GHG emissions Outstanding Impact, 51 % adaptation 0 % reduced/ avoided, disbursed amounts tonnes CO2e Project category tonnes CO2e/year to projects, SEK mn per SEK mn Renewable energy 634,446 7,878 80.5 Green buildings 4,915 13,295 0.4 Energy efficiency 21,796 235 92.7 Clean transportation 651 730 0.9 KEY PROCEDURAL ASPECTS Waste management 583 155 3.8 SEK 3bn Green Bond (6/2023) • Kommun invest’s Green Project portfolio Water management n/a 3,442 n/a exclusively consists of Green Loans to Swedish SEK 3bn Green Bond (12/2021) Climate change adaptation n/a 16 n/a municipalities and county councils/regions. Total USD 500m 662,390green bond (06/2021)25,750 n/a • Each loan is selected according to the Kommun Disbursed amounts withSEK CO 5bn impact green bond (05/202022,293) invest Green Bonds Framework (see pages 14–16). 2 The complete framework is available online. Impact, tonnes CO e perUSD SEK 600m mn green bond (04/2019) 29.7 2 • Kommun invest reports on a portfolio basis, Annual renewable energy generation, GWh 3,032,220 MWh p.a. and in Swedish kronor (SEK). F/X rate as per the Annual energy reduced/avoided, MWh 144,706 MWh p.a. date of Green Bonds issuance. • For this document, the reporting period ends 1) This table presents the calculated impact in terms of CO2 reduced or avoided. Aggregated project data reported represent both ex-ante estimates and ex-post outcomes. Reporting methodology presented on pages 38–46. on 31 December 2018. The complete project-by-project-reporting is available in spreadsheet format at kommuninvest.se ==> For investors ==> Green Bonds ==> Impact Reporting. 1 KEY REPORTING Impact attributable to green bond investors 78% METHODOLOGY Whereof impact attributable to Green Bond USD 600 mn maturing 23 April, 2019 19% • Kommun invest reports on the basis of the share Whereof Impact attributableTotal to commitments Green Bond SEK 5 bn, to maturing projec 5 May,ts 2020 19% of the project’s total investment cost financed with green bonds (net of redemptions). Whereof Impact attributableDisbursed to Green Bondto projec USD 500m,ts maturing 1 June, 2021 17% Whereof Impact attributable to Green Bond SEK 3 bn, maturing 15 December, 2021 12% • Impacts are based on outstanding disbursed amounts to projects. Whereof Impact attributable to Green Bond SEK 3 bn, maturing 1 June, 2023 12% • Total amounts committed (net of redemptions) 1) Total outstanding green bonds divided by total outstanding disbursed amounts to projects (in SEK). are indicated for reference. Kommun invest Green Bonds Impact Report 2018 3 Contents Word of welcome ................................................................... 5 PROJECT EXAMPLES CASES The role of Swedish Renewable energy .............................................................22 Uppsala ..................................................................................................7 local governments ................................................................ 6 Energy efficiency in energy systems ...... 24 Trollhättan Kommun invest – a provider Eidar Municipal Housing Company ............ 10 Green buildings ..................................................................... 26 of sustainable finance ...................................................... 8 Vårgårda Water management ........................................................30 Kommun invest Green Bonds ............................... 12 Municipal Housing Company ............................... 17 Clean transportation .......................................................32 Key reporting methodology .................................13 Skellefteå .........................................................................................18 Waste management .......................................................34 Project categories ...............................................................14 Kristianstad ................................................................................. 29 Climate change adaptation .................................. 36 Process for project evaluation and selection ...............................................................................16 Environmental management ..............................37 SDG mapping .............................................................................19 Green loan portfolio .......................................................20 Impact reporting methodology ..................... 38 ................................. Baselines for CO2 emissions 42 Collected data and Climate impact calculation .............................................................44 About Kommun invest About this report Kommun invest is a Swedish municipal cooper This report was written and compiled by: ation set up in 1986 to provide costefficient • Björn Bergstrand, Head of Sustainability/Senior Investor and sustainable financing for local govern Relations Manager, Kommun invest i Sverige AB kommuninvest.se ment investments in housing, infrastructure, • Erik Törnblom, Analyst, Kommun invest i Sverige AB schools, hospitals etc. The cooperation com Cover page: Shutterstock prises 289 out of Sweden’s 310 local govern Any errors, omissions or otherwise are our responsibility. ISBN: 9789198308136 ments, of which 277 municipalities and 12 Project impact reporting is based on data collected from county councils/regions. Kommun invest is the financed projects during Q12019. The data has been largest lender to the Swedish local govern reviewed by Kommun invest however their accuracy has not ment sector and the sixth largest credit institu been verified by neither Kommun invest nor a third party. tion in Sweden. At yearend 2018, total assets Climate impact calculations have been made by Kommun were SEK 417 billion (USD 46.5 billion1), with invest, and their accuracy has not been verified by a third a loan portfolio of SEK 356 billion (USD 39.6 party. The information has been reviewed and approved for billion). The head office is located in Örebro. publication by the Kommun invest Environmental Committee, 1) USD/SEK=8.971 as of 31 Dec, 2018 whose members are presented on page 16. 4 Kommuninvest Green Bonds Impact Report 2018 WORD OF WELCOME FROM THE ENVIRONMENTAL COMMITTEE Green finance A catalyst for change Green bonds are a major innovation and a key enabler for capital markets. We believe their greatest benefit is how they promote interdisciplinary coopera- tion at the project owner/ borrower level. THE ROLE CAPITAL MARKETS and green bonds can play in the transition to a sustain able global economy are becoming increasingly clear. The European Com mission’s Action Plan on Financing Sus tainable Growth, launched in March The members of the Kommuninvest Green Bonds Environmental Committee: Sara Pettersson, 2018, sets out the strategy to further City of Gothenburg; Susanne Arneborg, Municipality of Borås; Björn Söderlundh, Kommuninvest; connect finance with sustainability, Hanna Ryman, Municipality