ANNUAL REPORT 2016 Annual Report 2016

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ANNUAL REPORT 2016 Annual Report 2016 ANNUAL REPORT 2016 Annual Report 2016 Contents Mission fulfilment 1 President’s review 2016 45 Enhancing the environment 2 Executive Committee 46 Environmental parameters 4 Board of Directors 48 Improving competitiveness 6 Control Committee 53 Sustainability management 8 Board of Governors 54 Defining what matters 10 Ethics and integrity 55 Operations 13 Codes of conduct 56 Lending 17 About NIB 57 Lending areas 19 Five-year comparison 58 Other activities 21 Key figures 59 Loans agreed 2016 22 Capital structure 60 Treasury 25 Our stakeholders 62 Capital markets 26 Our people 64 NIB Environmental Bonds 29 Our ecological footprint 67 Asset liability management 32 GRI INDEX 68 Portfolio management 33 Report of the Board of Directors 87 Case studies 34 Operating and financial review 94 NIB 40th anniversary 35 Statement of comprehensive income 99 NIB 40: Financing the future-seminar 36 Statement of financial position 100 How NIB came to be 40 years ago 37 Changes in equity 101 Governance 41 Cash flow statement 102 NIB Annual Report 2016 This page is generated from NIB´s electronic Annual Report. You can find the complete report at annualreport.nib.int/2016 Annual Report 2016 Contents Notes to the financial statements 104 Note 15: Debts evidenced by Note 1: Accounting policies 104 certificates and swaps 145 Note 2: Risk management 111 Note 16: Other liabilities 146 Note 3: Segment information 125 Note 17: Equity 147 Note 4: Net interest income 127 Note 18: Collateral and commitments 148 Note 5: Commission income and fees received 128 Note 19: Fair value of financial instruments 150 Note 6: Net profit on financial operations 129 Note 20: Maturity profile of financial assets and liabilities 153 Note 7: Personnel expenses 130 Note 21: Interest rate risk 155 Note 8: Other general administrative expenses 133 Note 22: Currency risk 157 Note 9: Net loan losses 134 Note 23: Related party disclosures 159 Note 10: Debt securities 135 Note 24: Cash flow statement 160 Note 11: Loans outstanding Note 25: Exchange rates 161 and guarantee commitments 136 Note 26: Post balance sheet events 162 Note 12: Intangible assets, tangible Auditor´s report 163 assets (property and equipment) 141 Statement by the Control Committee 167 Note 13: Depreciation 143 Proposal by the Board of Directors to Note 14: Other assets 144 the Board of Governors 168 NIB Annual Report 2016 This page is generated from NIB´s electronic Annual Report. You can find the complete report at annualreport.nib.int/2016 MISSION FULFILMENT MISSION FULFILMENT NIB’s mission is to finance projects that improve competitiveness and the environment of the Nordic and Baltic countries. All projects considered eligible for financing are analysed for their potential socioeconomic and environmental impact. This is to ensure conformity with NIB’s mission and sound banking principles. In 2016, NIB signed 58 new loan agreements. Loans achieving a “good” or “excellent” mandate rating accounted for 96% of the total amount of lending, excluding investments in green bonds. The majority of environmental loans related to projects supporting the transition to a low-carbon economy in NIB’s member countries. This includes projects promoting climate change mitigation and renewable energy. Competitiveness-based loans mainly supported investments in municipal infrastructure, such as public transport and wastewater treatment projects as well as investments in research and development. Mandate rating % of loans agreed, excluding Lending Green Bond purchases NIB Annual Report 2016 1 ThisNIB - pageAnnual Reportis generated - Nordic Investment from BankNIB´s - Mission electronic fulfilment Annual Report. You can find the complete report at annualreport.nib.int/2016 ENHANCING THE ENVIRONMENT ENHANCING THE ENVIRONMENT Environmental concerns are integral to NIB’s daily activities and part of the Bank’s overall management systems. NIB’s environmental analysts and loan officers work in close cooperation to identify and assess eligible projects. When assessing the environmental impacts of loan projects the analyses focus on: improvements in resource efficiency development of a competitive low carbon economy protection of the environment and its ecosystem services development of clean technology In 2016, long-term loans for projects with a “good” or “excellent” environmental mandate rating amounted to an all-time high of EUR 1,567 million, or 37% of all agreed loans. Many of these environmental loans support the transition to a low-carbon economy by financing renewable energy projects, public transportation systems and green buildings. Public transport projects with climate change mitigation effects received a total of EUR 390 million in loans from NIB in 2016. Loans for biomass-fired power plants and hydropower investments in Sweden, Finland and Norway amounted to EUR 378 million. Loans to green buildings accounted for EUR 229 million. Examples of NIB’s environmental loans in 2016 NIB agreed a loan to finance the design, construction, operation and maintenance of the biomass combined heat and power (CHP) plant in Värtan, Stockholm. The biofuel-fired CHP plant was inaugurated in May 2016, and is an important step in developing a sustainable energy supply for Stockholm. The plan is for district heating in the city to be entirely produced from renewable or recovered energy by 2030. In Northern Norway, NIB signed a loan agreement with Helgeland Kraft for financing six hydropower plants with an estimated total generation capacity of 166 GWh annually. This amounts to about 16% of Helgeland Kraft’s total production. In order to increase the proportion of renewable fuels in its energy production, Helsinki’s energy utility Helen signed a loan with NIB to finance the construction of a new wood pellet district heating plant for peak load production in Salmisaari. The plant will replace an already demolished heavy oil fuel plant. The new wood pellet plant will have a fuel capacity of 100 MW and an estimated district heat output of 92 MW, or 230–280 GWh annually, enough to heat about 25,000 two-room apartments. The Salmisaari plant will become the largest of its kind in Finland. Protection of the environment and ecosystems NIB Annual Report 2016 2 ThisNIB - Annualpage Report is generated - Nordic Investment from BankNIB´s - Enhancing electronic the environment Annual Report. You can find the complete report at annualreport.nib.int/2016 ENHANCING THE ENVIRONMENT Environmental concerns are integral to NIB’s daily activities and part of the Bank’s overall management systems. NIB’s environmental analysts and loan officers work in close cooperation to identify and assess eligible projects. When assessing the environmental impacts of loan projects the analyses focus on: improvements in resource efficiency development of a competitive low carbon economy protection of the environment and its ecosystem services development of clean technology In 2016, long-term loans for projects with a “good” or “excellent” environmental mandate rating amounted to an all-time high of EUR 1,567 million, or 37% of all agreed loans. Many of these environmental loans support the transition to a low-carbon economy by financing renewable energy projects, public transportation systems and green buildings. Public transport projects with climate change mitigation effects received a total of EUR 390 million in loans from NIB in 2016. Loans for biomass-fired power plants and hydropower investments in Sweden, Finland and Norway amounted to EUR 378 million. Loans to green buildings accounted for EUR 229 million. Examples of NIB’s environmental loans in 2016 NIB agreed a loan to finance the design, construction, operation and maintenance of the biomass combined heat and power (CHP) plant in Värtan, Stockholm. The biofuel-fired CHP plant was inaugurated in May 2016, and is an important step in developing a sustainable energy supply for Stockholm. The plan is for district heating in the city to be entirely produced from renewable or recovered energy by 2030. In Northern Norway, NIB signed a loan agreement with Helgeland Kraft for financing six hydropower plants with an estimated total generation capacity of 166 GWh annually. This amounts to about 16% of Helgeland Kraft’s total production. In order to increase the proportion of renewable fuels in its energy production, Helsinki’s energy utility Helen signed a loan with NIB to finance the construction of a new wood pellet district heating plant for peak load production in Salmisaari. The plant will replace an already demolished heavy oil fuel plant. The new wood pellet plant will have a fuel capacity of 100 MW and an estimated district heat output of 92 MW, or 230–280 GWh annually, enough to heat ENHANCINGabout 25,000 two-room THE ENVIRONMENT apartments. The Salmisaari plant will become the largest of its kind in Finland. Protection of the environment and ecosystems Wastewater treatmentWastewater treatment NIB - Annual Report - Nordic Investment Bank - Enhancing the environment During 2016, NIB agreed a significantDuring number 2016, NIB of wastewateragreed a significant treatment number projects, of wastewatereight loans totallingtreatment EUR 683 million. projects, eight loans totalling EUR 683 million. The City of Stockholm decided toThe double City of the Stockholm capacity decidedat the Henriksdal to double undergroundthe capacity atwastewater the Henriksdal plant undergroundto more than wastewater500,000 cubic plant metres to more per thanday and500,000 cubic to metres per day and to close its facility at Bromma. Thisclose will increase its facility the at capacity Bromma. o fThis Stockholm’s will increase sewer the network. capacity of Stockholm’s sewer network. In addition, the production of biogasIn addition, at Henriksdal the production will almost of biogas double at toHenriksdal 35 million will normal almost cubic double meters to 35 million per year. normalImproving cubic the meters sewer networkper year. will Improving also the sewer network will also reduce overflows of untreated wastewaterreduce overflows discharged of untreated into Lake wastewater Mälaren from discharged an estimated into Lake 185,000 cubic Mälaren from meters an estimated annually to185,000 cubic less than 10,000.
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