Investors support Baltic cleanup through new bond issue
Nordic investors have highlighted a new fixed income instrument designed to support the cleanup of the Baltic Sea, one of the most poluted parts of the world's oceans.
The 2024 bond has been issued by the Nordic Investment Bank with an Aaa/AAA (Moody's/S&P) rating, offering a coupon of 0.375%. NIB said the SEK2bn (€194m) bond proceeds would focus on water resource management and protection, which includes wastewater treatment, prevention of water pollution and water related climate change adaption.
The Baltic Sea suffers from high levels of nitrogen and phosphorous discharged from the countries surrounding it, which means treating wastewater is necessary to ensure sutsainable development in future, particularly urban development, NIB said. It has already engaged in financing a number of projects linked to the Baltic Sea over the past 15 years.
Lars Eibeholm, head of Treasury at NIB, said: "NIB has been active in the green bond market since 2011 and is the largest issuer of green bonds in the Nordic region. The Nordic-Baltic Blue Bond is specifically aimed at investors that are conscious of the challenges facing the region's water resources, especially those affecting the Baltic Sea. It gives investors the opportunity to directly target water-related projects that address these challenges."
One of the projects that will receive financing from the Nordic-Baltic Blue Bond is the Nya Slussen project in Stockholm. NIB is not only financing clean transport solutions at the Slussen traffic hub, but also the redevelopment of the Slussen water locks. The expansion of the water locks will increase the drainage capacity and accommodate higher floodgates by adding two larger water channels beside the locks.
The Nya Slussen redevelopment project is a crucial flooding mitigation measure that will allow Stockholm and the Mälar region to prepare for the effects of rising sea levels and more extreme weather conditions in the future. For more on the project, visit NIB's website.
Christopher Flensborg, head of Climate & Sustainable Finance in Large Corporates & Financial Institutions at SEB, commented on the issue in light of SEB's role arranging the issue and as adviser.
"SEB acted as a lead manager for this SEK2bn transaction that supports water projects around the Baltic Sea. The bond, which was oversubscribed more than two times, will allow the financial sector to get a better understanding of the challenges of the Baltic Sea's ecosystems and the solutions to address these challenges."
"The Nordic Investment Bank has long sought an opportunity to issue a 'blue bond' directly tied to water-related projects. This has now been made possible thanks to the development of a quality-assured environmental framework coupled to a secondary assessment by the independent research institute Cicero."
Helena Lindahl, senior portfolio manager Storebrand Asset Management (featured previosly in InvestmentEurope discussing greeen bonds https://www.investmenteurope.net/investmenteurope/news/3724395/green-bonds-financial-instrument-term-change) said: "We have long been seeking a solution, on how to finance a better health of the Baltic Sea and are therefore thrilled to participate in NIB's Blue Bond. We hope that this, blue bond, will be followed by many others."
"The Baltic Sea region is the home of nine countries and 90m people. The health of the region is consequently very important. I therefore urge more companies in the region to take the opportunity and proactively utilize earmarked, green or blue loans. It is a very effective way to show determination, achieve true impact and long term sustainable growth."
To date, the NIB has financed over €3.5bn worth of projects through its Environmental Bonds.
| Customer | Country | Year of latest disbursement | Maturity | Total disbursements on loan | NEB-financed | NEB-financed share | Sector |
|---|---|---|---|---|---|---|---|
| Kiinteistö Oy Tripla Mall | Finland | 2018 | 2026 | EUR 42m | EUR 42m | 100% | Green buildings |
| E-CO Energi Holding AS | Norway | 2018 | 2028 | NOK 1,800m | EUR 181m | 100% | Renewable energy |
| Republic of Lithuania | Lithuania | 2018 | 2035 | EUR 100m | EUR 100m | 100% | Energy efficiency |
| City of Kauhava | Finland | 2018 | 2038 | EUR 10m | EUR 10m | 100% | Energy efficiency |
| Bane NOR Eiendom AS | Norway | 2018 | 2025 | NOK 350m | EUR 37m | 100% | Green buildings |
| UAB Lidl Lietuva | Lithuania | 2018 | 2028 | EUR 50m | EUR 4m | 8% | Green buildings |
| City of Stockholm | Sweden | 2018 | 2028 | SEK 500m | EUR 16m | 32% | Clean transport solutions |
| City of Uppsala | Sweden | 2018 | 2023 | SEK 400m | EUR 27m | 67% | Water management & protection |
| City of Porvoo | Finland | 2017 | 2037 | EUR 50m | EUR 36.5m | 73% | Energy efficiency |
| Municipality of Kungälv | Sweden | 2017 | 2036 | SEK 500m | EUR 17m | 34% | Water management & protection |
| City of Stockholm | Sweden | 2017 | 2027 | SEK 1,500m | EUR 157m | 100% | Water management & protection |
| City of Mikkeli | Finland | 2017 | 2040 | EUR 20m | EUR 20m | 100% | Water management & protection |
| Skanska Financial Services AB | Poland | 2017 | 2024 | USD 100m | EUR 86m | 100% | Green buildings |
| Lidl Suomi Ky | Finland | 2017 | 2027 | EUR 70m | EUR 60m | 86% | Green buildings |
| Vasakronan AB | Sweden | 2017 | 2027 | SEK 2,345m | EUR 243m | 100% | Green buildings |
| Lahti Energia Oy | Finland | 2017 | 2031 | EUR 75m | EUR 75m | 100% | Renewable energy |
| City of Stockholm | Sweden | 2017 | 2026/2027 | SEK 3,000m | EUR 317m | 100% | Water management & protection |
| Municipality of Varberg | Sweden | 2017 | 2022 | SEK 100m | EUR 10.4m | 100% | Water management & protection |
| Sydvatten AB | Sweden | 2017 | 2031 | SEK 205m | EUR 21m | 100% | Energy efficiency |
| Municipality of Ängelholm | Sweden | 2017 | 2022 | SEK 50m | EUR 5m | 100% | Water management & protection |
| Njudung Energi Sävsjö AB | Sweden | 2017 | 2037 | SEK 40m | EUR 4m | 100% | Renewable energy |
| AB Transitio | Sweden | 2016 | 2036 | SEK 695m | EUR 71m | 100% | Clean transport solutions |
| Helen Oy | Finland | 2016 | 2026 | EUR 22m | EUR 17m | 77% | Renewable energy |
| Helsinki City Transport HKL | Finland | 2016 | 2036 | EUR 60m | EUR 60m | 100% | Clean transport solutions |
| City of Oslo | Norway | 2016 | 2041 | NOK 1,500m | EUR 165m | 100% | Water management & protection |
| Helgeland Kraft AS | Norway | 2016 | 2031 | NOK 470m | EUR 46m | 89% | Renewable energy |
| AB Fortum Värme Holding, co-owned with City of Stockholm | Sweden | 2016 | 2026 | SEK 600m | EUR 63m | 100% | Renewable energy |
| S-ryhmän logistiikkakeskukset Oy | Finland | 2016 | 2023 | EUR 117m | EUR 117m | 100% | Green buildings |
| Ekerövatten AB | Sweden | 2016 | 2018/2026 | SEK 100m | EUR 9m | 85% | Water management & protection |
| City of Bergen | Norway | 2016 | 2036 | NOK 1,000m | EUR 108m | 100% | Water management & protection |
| Municipality of Ängelholm | Sweden | 2016 | 2021/2031 | SEK 100m | EUR 11m | 100% | Water management & protection |
| Vasakronan AB | Sweden | 2016 | 2026 | SEK 445m | EUR 47m | 100% | Green buildings |
| Stockholm County Council | Sweden | 2016 | 2026 | SEK 1,000m | EUR 107m | 100% | Clean transport solutions |
| Käppalaförbundet | Sweden | 2016 | 2041 | SEK 151m | EUR 10m | 60% | Water management & protection |
| Elkem AS | Norway | 2015 | 2023 | EUR 40m | EUR 19m | 47% | Resources & waste management |
| Fastighets AB ML 4 | Sweden | 2015 | 2039 | SEK 1,500m | EUR 159m | 100% | Green buildings |
| SJ AB | Sweden | 2015 | 2025 | SEK 770m | EUR 82m | 100% | Clean transport solutions |
| City of Vantaa | Finland | 2015 | 2034 | EUR 52m | EUR 52m | 100% | Clean transport solutions |
| Vantaan Energia Oy | Finland | 2015 | 2034 | EUR 64m | EUR 64m | 100% | Resources & waste management |
| Lyse AS | Norway | 2015 | 2030 | EUR 113m | EUR 113m | 100% | Renewable energy |
| Energa SA | Poland | 2015 | 2026 | PLN 67.5m | EUR 16m | 100% | Renewable energy |
| Skellefteå Stadshus AB | Sweden | 2014 | 2024 | SEK 450m | EUR 47m | 100% | Renewable energy |
| Nortura SA | Norway | 2014 | 2024 | NOK 330m | EUR 36m | 100% | Energy efficiency |
| Växjö Energi AB | Sweden | 2014 | 2034 | SEK 600m | EUR 63m | 100% | Renewable energy |
| EPV Tuulivoima Oy | Finland | 2014 | 2026 | EUR 20m | EUR 20m | 100% | Renewable energy |
| Tranås Stadshus AB | Sweden | 2014 | 2034 | SEK 170m | EUR 18m | 100% | Renewable energy |
| Town of Norrtälje | Sweden | 2014 | 2021 | SEK 150m | EUR 16m | 100% | Water management & protection |
| Energiselskapet Buskerud AS | Norway | 2014 | 2029 | NOK 350m | EUR 8m | 20% | Renewable energy |
| Eidsiva Energi AS | Norway | 2014 | 2027 | NOK 226.5m | EUR 27m | 100% | Renewable energy |
| Tekniska verken i Linköping AB | Sweden | 2014 | 2029 | SEK 450m | EUR 48m | 100% | Resources & waste management |
| Akershus Energi AS | Norway | 2014 | 2029 | NOK 90m | EUR 11m | 100% | Renewable energy |
| AB Fortum Värme Holding, co-owned with City of Stockholm | Sweden | 2014 | 2026 | SEK 1,400m | EUR 153m | 100% | Renewable energy |
| City of Lahti | Finland | 2014 | 2029 | EUR 30m | EUR 30m | 100% | Energy efficiency/ transport |
| UPM-Kymmene Oyj | Finland | 2013 | 2020 | EUR 50m | EUR 50m | 100% | Renewable energy |
| AB Transitio | Sweden | 2013 | 2028 | SEK 85m | EUR 9m | 100% | Clean transport solutions |
| Agder Energi AS | Norway | 2013 | 2028 | EUR 58m | EUR 58m | 100% | Renewable energy |
| Vimmerby Energi & Miljö | Sweden | 2013 | 2033 | SEK 168m | EUR 19m | 100% | Renewable energy |
| SKF AB | Sweden | 2013 | 2020 | EUR 100m | EUR 25m | 25% | Energy efficiency |
| Helsinki Region Environmental Services Authority | Finland | 2013 | 2021 | EUR 15m | EUR 15m | 100% | Water management & protection |
| DONG Energy A/S | Denmark | 2011 | 2022 | EUR 240m | EUR 91m | 38% | Renewable energy |
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