Plans and visions of Sweden
With green bonds, fixed-income investors support lending for investment projects that contribute to climate change mitigation or adaptation.
Sweden, which has the goal of becoming one of the world’s leading nations that do not use fossil fuels, is the location of all financially supported projects. The main goal of Sweden’s environmental policy is to hand over to the next generation a society in which the country’s main environmental problems are solved without negatively affecting Sweden’s environment and health.
Sweden’s local government, which accounts for most of the public investment, is leading much of the effort. More than 90 % of Swedish municipalities have set or have set themselves national or regional environmental targets.
Projects worth Billions for a Greener Future
Sweden’s largest municipal financing agency, Kommuninvest, gives green bonds to institutional investors to finance investment projects by municipal and regional governments. This is in response to demand for improved green financing instruments. Building a green loan project portfolio of almost SEK 25 billion (USD 3.1 billion) enables the issuance of green bonds; a total of SEK 8.6 billion (USD 1.1 billion) for 27 renewable energy projects has currently been committed to avoid 395,730 metric tonnes of CO2 emissions annually. This would take 85,000 cars off the road.
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Sweden’s great Potential
Sweden’s energy target is to increase energy efficiency by 50% by 2030 and produce 100% of its electricity from renewable sources by 2040. In the 2018 budget statement, major investments in solar cells were planned at SEK 3 billion (EUR 300 million) by 2020.
Under the Climate Leap programme, 200 million Swedish kronor have already been allocated to initiatives by cities, municipalities, schools, businesses, etc. to reduce greenhouse gas emissions. Over 1,000 local climate investments have been made as a result, including the provision of infrastructure for electric vehicle charging and renewable fuels such as biogas. SEK 4.4 billion (EUR 440 million) has been earmarked for further support to municipalities.
Sweden’s example shows that other countries wishing to promote the adoption of green bonds should be careful to emphasise leadership in sustainability, cooperation between issuers and investors, active communication, high visibility, and thorough disclosure of sustainable finance activities.
