NIB Treasury: Investors to buy into Nordic Baltic environmental projects

The Bank is introducing its NIB Environmental Bond (see the press release). The NIB Newsletter has asked Lars Eibeholm, the Bank’s Head of Treasury and CFO, to tell more about the new treasury notes.

“The NIB Environmental Bond is an investment product geared at the investors willing to support sustainable environmental investments of the Nordic Baltic region,” says Mr Eibeholm.

“The investors would like to see their money working for the honourable purpose of mitigating climate change and improving the health of the seas. Following this demand, NIB hails investors’ aspiration to buy into responsible corporate citizenship,” he adds.

The proceeds gained from selling the Environmental Bond will be disbursed to environmental projects being implemented in the member countries and scoring “good” or “excellent” in the mandate rating.

Enhancing the environment is part of NIB’s mandate as defined by the Bank’s owners. For about four years, NIB has run special lending facilities, CLEERE and BASE, aimed at projects dealing with climate change and water pollution. The total amount spent on both facilities so far is approaching the EUR 3 billion mark.

“We would like the Nordic Baltic region to be seen as a frontrunner in energy efficiency and tapping renewable resources. These issues are high on the political agenda. Renewable energy production needs to become more reliable. The goal should be to become less dependent on fossil power plants which today are acting as buffers to renewable sources, all with the aim of reducing emissions. For that to come true, the region needs to integrate its grids even more thoroughly, by building powerful interconnections. These are the areas where NIB is contributing to the benefit of its investors and owners,” says Mr Eibeholm.

NIB has financed projects that are helping make significant strides toward an environmentally sustainable region. Two Estlink cables have been built across the Gulf of Finland connecting the Baltic grid to the Nordic network. The Bank has also provided loans for large off-shore wind turbine parks in Denmark, one built on the North Sea shelf and another under construction off the island of Anholt.

The Environmental Bonds will be issued once or twice a year depending on market demand. The net proceeds will be kept in a separate portfolio pending disbursement to eligible projects.