Sweden to issue green bonds by 2020

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The Swedish government has tasked the Swedish National Debt Office (Riksgälden) with issuing green bonds by 2020, to raise funds for budget expenditure on sustainable investments and projects.

Green bonds have previously been issued by both private and public entities in Sweden, but this will mark the first time that central government debt is issued this way. The Debt Office is set to analyse how the issue should be made, as it works with the country's Government Offices to develop a 'green framework' necessary to distinguish green bonds from other bonds. The framework will also determine which items in central government expenditure will be financed by issuing green bonds. A reporting mechanism will also be developed.

Selecting where to spend the money raised will be led by reference to the government's climate and environment policy, which in turn is subject to monitoring of environmental objectives overseen by the country's Parliament (Riksdag). The order that has now flowed to the Debt Office is the result of a budget agreement - the so-called January Agreement - struck between the Swedish Social Democratic Party, the Centre Party, the Liberal Party and the Swedish Green Party.

Minister for Financial Markets Per Bolund said: "The decision that the state will now issue green bonds is an important part of the transition to sustainable development. The financial market plays a key role in this transition, and the government wants to improve the opportunities for sustainable investments by promoting the market for green bonds."

"[The Debt Office] assignment marks the start of the preparations needed for the bond issue, such as the selection of which budget expenditures should be included and appropriate maturity."

Debt Office director general Hans Lindblad added: "We are fully committed to implementing this assignment in an effective and transparent way. The effects of the climate and environmental measures that are funded by the state's green bonds should be easy for investors to follow and evaluate."

The Debt Office noted that the size of the green bonds issue will be determined once the volume of 'green expenditure' is defined in the central government's budget.