17 Sep 2020
EUR 24.77 million
Financial institutions and SMEs
The rapidly advancing green bond market in the Nordic and Baltic countries has recently become a subject of two studies published by Climate Bonds Initiative, a UK-based green finance advocacy group: The Green Bond Market in the Nordics and Nordic and Baltic Public Sector Green Bonds.
The report on the green bond market in Denmark, Finland, Iceland, Norway and Sweden provides an overview of the region’s green bond market and sets out our analysis by issuer type, financed sectors and countries.
Some hard facts from the report:
In 2017, the Nordic green bond annual issuance totalled EUR 7.8 billion, 64% up on a year before and a tenfold increase over the past five years. Fifteen new Nordic green bond issuers entered the market. The Nordics account for 6.7% of global cumulative green bond issue volume and 18.5% of European issuance. By cumulative issuance, Sweden ranks sixth on a global scale, Norway 16th, Denmark 17th and Finland 20th. NIB is the region’s largest issuer to date.
“The Nordic model, based on decentralisation and cooperation to enhance the effectiveness of service delivery, has positioned the region at the forefront of integrating environmental and sustainability targets within budgets at central and local government levels”, says Sean Kidney, CEO of Climate Bonds Initiative.
The report highlights NIB and KBN Kommunalkredit from Norway as the very first to start issuing green bonds, both debuting in 2010. Recently, there have been several other events in the development of the Nordic green bond market: for instance, the first green city bond from the City of Gothenburg, or the first corporate green bond, or the first green bond from a real estate company from Vasakronan in Sweden.
Nordic stock exchanges have also contributed to the development of the green bond market. Oslo Børs and the Nasdaq Stockholm were the first stock exchanges to introduce dedicated green or sustainable bond segments in 2015.
According to the study Nordic and Baltic Public Sector Green Bonds, local government, local government lending agencies and public entities in the region are well positioned to fund climate action. The public sector generates almost half of green bond issuance in the Nordic and Baltic countries.
All three Baltic countries have recently issued green bonds. Green bond issuance has come from state-owned energy companies, Latvenergo in Latvia and Lietuvos Energija in Lithuania, the clean energy developer Nelja Energia in Estonia, and the financial investment company Altum in Latvia.
Lietuvos Energija’s EUR 300 million issue is by far the largest green bond in the Baltic countries, accounting for two thirds of the Baltic green bond market and nearly the whole of its corporate segment.
Earlier this year, NIB published a report on the issuance of NIB Environmental Bonds in 2017. Last year, the Bank issued seven green bonds for a total of EUR 920 million that financed fourteen projects inrenewable energy, energy efficiency, wastewater treatment and green buildings.