Investors support Baltic cleanup through new bond issue

Jonathan Boyd
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 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


Jonathan Boyd
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Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.