Kommun invest Green Bonds Impact Report, December 2019 Report on 329 Swedish local government GREEN LOANS GREEN BONDS investment projects financed by Kommun invest Green Bonds as of year-end 2019 At 31 December 2019, Kommun invest had disbursed a total of SEK 40.3 (25.8) billion, equivalent to USD 4.3/EUR 3.9 billion, in Green Loans to investment projects aligned with our Green Bond Framework. 40.3 36.6 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 2019. 9.9 % 8.1 % Annual greenhouse gas (GHG) emissions savings tCO 610,596 2 17.8 tCO2 per SEK mn 37,695 tCO 2 Impact, tonnes CO2e per SEK mn reduced annual emissions4 (relevant to 85 % of Green Loan disbursements) 572,901 tCO2 avoided annual emissions3 Energy savings in green buildings 110.8 GWh Energy savings from 349,727 energy efficiency projects 40.5 GWh Increase in person equivalents (p.e.) Whereof avoided energy use3 supplied by water and wastewater facilities (reported share). Total p.e. 33.6 GWh supplied by projects: 1,030,686 Whereof reduced energy use4 6.9 GWh 173.0 tonnes per year 2.9 TWh Reduced nitrogen Annual renewable emissions from water and energy generation wastewater facilities 1) Total amount of Green Loans divided by total loan portfolio. 2) Total amount of Green Bonds outstanding divided by total amount of debt outstanding. 2 Kommun invest Green Bonds Impact Report 2019 3) Refers to a baseline/alternative reference scenario. 4) Refers to a direct or absolute reduction in operation. Executive Summary AS OF 31 DEC 2019 GREENSEKbn BONDS ISSUANCE AND GREEN PROJECT PORTFOLIO GREEN PROJECT PORTFOLIO SEKbn DISTRIBUTION based on disbursed amounts Environmental Waste management management 0.3 % 0.6 % Water management Renewable energy 14.5 % 23.2 % 2015 2016 2017 2018 2019 Clean Energy efficiency 0.6 % Disbursed2015 Green Loans 2016 2017 USD 600m Green2018 Bond (04/2019) 2019 transportation Committed Green Loans SEK 5bn Green Bond (05/2020) 5.3 % (not yet disbursed) USD 500m Green Bond (06/2021) SEK 3bn Green Bond (12/2021) Green buildings Climate change SEK 6bn Green Bond (6/2023) 55.6 % adaptation 0 % SEK 8.5bn Green Bond (3/2024) USD 1bn Green Bond (4/2023) CO2 IMPACT AND GREEN INDICATORS based on outstanding disbursed amounts1 GHG emissions Outstanding Impact, Impact attributable to 1 reduced/ avoided, disbursed amounts tonnes CO2e green bond investors 91% Project category tonnes CO2e/year to projects, SEK mn per SEK mn Whereof impact attributable to Renewable energy 566,161 9,330 61 Green Bond 5bn, Green buildings 6,045 22,376 0 maturing 5 May, 2020 12% Energy efficiency 26,409 235 112 Whereof impact attributable to Green Bond USD 500m, Clean transportation 10,501 2,121 5 USD 1 bn Green Bond (4/2023) maturing 1 June, 2021 11% Waste management 1,479 229 6 SEKUSD 8.5bn 1 bn Green Green Bond Bond (4/2023) (3/2024) Whereof impact attributable to Water management n/a 5,848 n/a Green Bond SEK 3bn, SEK 6bn8.5bn Green Green Bond Bond (6/2023) (3/2024) Climate change adaptation n/a 16 n/a maturing 15 December, 2021 7% SEK 3bn6bn Green Bond (12/2021)(6/2023) Enviromental manegement n/a 129 n/a Whereof impact attributable to USDSEK 3bn 500m Green Green Bond Bond (12/2021) (06/2021) Green Bond USD 1bn, Total 610,596 40,283 n/a maturing 24 April, 2023 24% SEKUSD 5bn 500m Green Green Bond Bond (05/2020) (06/2021) Disbursed amounts with CO 2 impact 34,291 Whereof impact attributable to SEK 5bn Green Bond (05/2020) Impact, tonnes CO2USDe per SEK 600m mn Green Bond (04/2019) 17.8 Green Bond SEK 3 bn, Annual renewable energyUSD generation,600m Green GWh Bond (04/2019) 2,903,322 MWh p.a. maturing 1 June, 2023 7% Annual energy reduced/avoided, MWh 151 389 MWh p.a. Whereof impact attributable to Green Bond SEK 8,5bn, 1) This table presents the calculated impact in terms of CO2 reduced or avoided. Aggregated project data reported maturing 27 Mars, 2024 21% represent both ex-ante estimates and ex-post outcomes. Reporting methodology presented on pages 41-49. The complete project-by-project-reporting is available in spreadsheet format at kommuninvest.se ==> For 1) Total amount of outstanding green bonds divided by total investors ==> Green Bonds ==> Impact Reporting. outstanding disbursed amounts to projects (in SEK). Basic information Green Bond Report comprises projects financed under GB frameworks KEY FACTS Frameworks applied dated March 2018, January 2016 and May 2015 • The Green Project Portfolio consists of Green Related Green Bond ISIN(s) XS1383831648 (RegS) / US50046PAU93 (144A); Loans to Swedish municipalities and regions. XS1508534861; XS1618289802 (RegS) / Each Green Loan is selected according to the US50049GAB86 (144A); XS1897258098; XS1814404577 Kommuninvest Green Bonds Framework (see pages 16–18). The complete framework External verifier KPMG is available online. of allocation report • Kommuninvest reports on a portfolio basis in Reporting period Reporting for calendar year 2019. Comprises all eligible Swedish kronor (SEK). F/X rate as per the date projects financed from GB programme start in 2015 until of Green Bonds issuance. year-end 2019. • Kommuninvest reports impact based on the share Report publication date March 30, 2020 of the project’s total investment cost financed with Frequency of reporting Annual Green Bonds. Impacts are based on outstanding Next reporting planned for March/April 2021 disbursed amounts to projects (net of redemptions). Reporting approach Portfolio-based and project-by-project reporting • Reporting is undertaken in accordance with recommendations outlined in the Nordic Public Sector Issuers: Position Paper on Green Bonds Impact Reporting. Kommuninvest Green Bonds Impact Report 2019 3 Contents Executive summary ..............................................................3 GREEN LOANS / PROJECT PORTFOLIO CASES Contents ..............................................................................................4 Green loan portfolio ........................................................22 Green hospitals: Achieving efficiency through geothermal solutions ..............................7 Word of welcome ................................................................... 5 Renewable energy ............................................................ 24 Kommuninvest: Reducing impact The role of Swedish Energy efficiency in from business travel ........................................................... 9 local governments ................................................................ 6 energy systems ..................................................................... 26 Electrifying bus fleets: Kommun invest – a provider Green buildings ......................................................................28 Grid factor choice matters ....................................... 12 of sustainable finance ...................................................... 8 Clean transportation .......................................................32 Water projects: Analysis GREEN BONDS Waste management .......................................................34 shows breadth of impact ...........................................19 Kommun invest Green Bonds ...............................14 Water and wastewater Municipal energy efficiency: management ............................................................................. 36 Showcase Kalmar ...............................................................20 Key reporting methodology .................................15 Climate change adaptation .................................. 39 Environmental Project categories ...............................................................16 remediation for new city district.....................31 Environmental management .............................40 Process for project evaluation and selection ...............................................................................18 METHODOLOGY & BASELINES Mapping vs the EU Environmental Impact reporting methodology .......................41 Objectives and the SDGs ...........................................21 Baselines for CO2 emissions ................................ 45 Collected data and Climate impact calculation ..............................................................47 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 cost-efficient • Björn Bergstrand, Head of Sustainability and sustainable financing for local govern- • Jens Enocsson, Sustainability Analyst kommuninvest.se ment investments in housing, infrastructure, • Erik Törnblom, Analyst schools, hospitals etc. The cooperation com- Cover page: Shutterstock prises 290 out of Sweden’s 310 local govern- Any errors, omissions or otherwise are our responsibility. ISBN: 978-91-983081-4-3 ments, of which 278 municipalities and 12 Project impact reporting is based on data collected from county councils/regions. Kommun invest is the financed projects during Q1-2020. 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.