SEB said that it had facilitated the first Nordic ‘green’ bond issuance with a Swedish krona (SEK) 500m bond for the City of Gothenburg.
The bank commented that the issuance marks the City of Gothenburg as a pioneer in the Nordic region for using the green bond financial framework, developed by SEB together with The World Bank and other Swedish investors. The issuance is part of a potential SEK2bn green bond programme from Gothenburg to help fund environmental projects.
“The City of Gothenburg’s issuance represents a breakthrough for green bonds in the Nordics,” said Christopher Flensborg, head of sustainable investments at SEB. “Interest in green bonds continues to grow among investors.
“They see that green bonds offer the same yield as other investments with similar conditions, but at the same time these bonds contribute to a better environment and higher awareness of climate-related challenges and solutions,
Through its environmental programme, the City of Gothenburg intends to raise financing to support various environmental projects on public transport, water management, energy and waste management.
“We have a thorough programme for environmental projects in Gothenburg,” said its chief financial officer (CFO), Magnus Borelius. “The City intends to be an obvious choice for investors seeking green investments,
The green bond is for six years and will be listed on the London Stock Exchange (LSE). Green bonds were first issued by The World Bank in 2008, after developing the concept with SEB starting in 2007. Since then, the market has steadily grown.
In total, organisations worldwide including, the European Bank for Reconstruction and Development (EBRD), the World Bank and the Export-Import Bank of Korea have issued green bonds worth US$10bn. The concept is seen as a way to generate awareness among financial institutions on climate-related challenges and solutions. Many other institutions including the United Nations are interested in understanding how the concept can be used.
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