Joensuu awarded the Green Pioneer of the Year

The award was presented to Joensuu bythe Minister of the Environment, Kimmo Tiilikainen,and MuniFin’s President and CEO Esa Kallio.

“The purpose of this award is to highlight operators who have set themselves ambitious goals and who have integrated environmental thinking into all their activities in an exemplary way,” says Esa Kallio.

Joensuu has a comprehensive approach to environmental thinking. Its environmental objectives are recorded in the City’s strategy, and climate effects are taken into consideration in all its planning and activities. Environmental thinking also becomes tangible in the everyday lives of the city’s residents through its new day-care centres and schools, which utilise green technology and are funded by MuniFin’s Green Financing.

According to Mayor Kari Karjalainen, environmental impacts are widely considered in the City’s public procurement.

“It is Joensuu’s ambitious goal to be carbon neutral by 2025. This requires concrete action. As we are investing in construction in any case, why not take environmental impacts into account, as well as the need for space? This same way of thinking is repeated in our public procurement. Last year, we took note of environmental criteria in more than 90% of all of the City’s competitive procurement.

As a reward for being a Green Pioneer, MuniFin will donate to the City of Joensuu a work of environmental art to be located in a prominent place in the city centre. The work of art will be finished in the summer of 2019 and will adorn the playground close to the Joensuu market place along a pedestrian street. The work is designed by the Finnish company Berry Creative, which specialises in creative environmental planning.

Lively debate on the environmental impacts of construction

The Green Pioneer Award was presented to the City of Joensuu on 23 January at a seminar on low-carbon construction organised by MuniFin. The event included a lively debate on the environmental impacts of construction and the built environment.

In his opening speech, Minister Kimmo Tiilikainen remarked that the time for sporadic climate-related action is over and now it is time also for the building trade to start to work in earnest to safeguard the environment.

Björn Söderlundh from Kommuninvest gave an overview of Sweden, where 90% of the municipalities have climate-related objectives and municipalities compete with each other for achievements. Antti Kontio from MuniFin emphasised that cooperation between the state, municipalities and corporations is the only way to achieve the climate targets set.

The seminar’s energetic panel discussed, for example, the role of urban planning and zoning in reducing climate impacts, the role and potential of materials, and the necessity of standards as a factor in guiding choices.

Saara Vauramo, the Environmental Director of the City of Lahti,gave an overview of the City’s objectives and the changes that have occurred there. This year, Lahti will be the first city in Finland to adopt an application that will enable its residents to engage in emissions trading.

Actively involved throughout the seminar, the audience voted the choices affecting the life cycle of buildings as the main factor for climate impacts in construction and the maintenance of the built environment.

More than a traditional school – the new Kyyjärvi school centre is a forerunner of a modern learning environment

Having suffered from indoor air quality problems, the Nopola School Centre was transformed over a period of a couple of years into a multi-purpose school that promotes modern interaction and learning together. The costs of the school project, which were funded by real-estate leasing, fell by half, thanks to careful economic planning.

Having suffered from indoor air quality problems, the Nopola School Centre was transformed over a period of a couple of years into a multi-purpose school that promotes modern interaction and learning together. The costs of the school project, which were funded by real-estate leasing, fell by half, thanks to careful economic planning.

This is a situation familiar to many Finnish municipalities: old school buildings built mainly in the 60s and 70s are coming to the end of their life cycle, and problems with indoor air quality are discussed in both everyday conversations and debates in the media nationwide. 

The municipality of Kyyjärvi in Central Finland was facing such a situation four years ago: multiple repair attempts had failed to resolve the issue, and the only comprehensive school in the small municipality was no longer a safe learning place for schoolchildren. In 2014 a decision was made to build a new school centre.

Right from the start, community spirit was at the heart of the school design. In the design phase, the users of the school space had their say and were carefully listened to. Kyyjärvi set to designing the school centre with great energy. 

“We wanted a school that reflected its users. Right from the outset, the idea was to build more than a traditional school, a school that had something new to offer,” says Jouko Huumarkangas, Chairman of the Municipal Board of Kyyjärvi.

However, the designs and multiple wishes escalated both the size and cost of the school.

“The result of the first design was a draft of a very traditional school whose costs were estimated at EUR 8 million,” Huumarkangas recalls.

Economic adviser to the municipality

It was time to take a step back and critically assess the municipality’s economic capacity. Municipality Finance became involved in the project at an exceptionally early stage, even before the new design was completed. The result of MuniFin’s analysis set a new framework for the school project.

“A new school centre is always a huge investment. In Kyyjärvi, the investment had grown over the years and, at a cost of EUR 8 million, would have unduly burdened Kyyjärvi’s economy. Together with the decision-makers of the Kyyjärvi municipality, we started exploring other options,” says Daniel Eriksson, Financing Manager at MuniFin.

Around the same time, the Finnish National Agency for Education released a new curriculum that emphasised functionality and learning together, giving the design of the Nopola School Centre new impetus. The premises were designed with particular attention to their multi-purpose use and utilisation also outside school hours.

“It finally felt like we were heading in the right direction. One noteworthy point taken into account was the fact that often the utilisation rate of school facilities is very low. With these things in mind, the construction firm designed a much smaller school in terms of square metres, but a functional, modern one, which can be used in a versatile way also for recreational activities. What the design lacked is the traditional labyrinthine complexity typical of school buildings,” says Huumarkangas.

In the completed solution, the square metres of the school centre are efficiently utilised with no wasted space.

“The effective use of space means that the total square metres of the school centre could be substantially reduced without endangering the functionality of the building designed for 145 students. In the end, the completed version is less than half the cost of the previous design and well aligned with the economic capacity of the Kyyjärvi municipality,” Eriksson continues.

Real-estate leasing brings flexibility to loan repayment

Similarly to the school centre, its form of funding was also non-traditional. Instead of a balance sheet loan, Kyyjärvi decided on flexible real-estate leasing. In the real-estate leasing model, MuniFin is the owner and financier of the building, also during its construction, while the municipality of Kyyjärvi leases the Nopola School Centre from MuniFin and is responsible for its maintenance.

The popularity of this model in the acquisition of social projects, such as schools and day care centres, has grown rapidly. In Kyyjärvi, this solution was favoured because of the amortisation of investment-related costs.

“We simply didn’t want to put all our eggs in one basket. For us, it made more sense to amortise costs over a longer period to avoid overburdening the economy of our small municipality,” Huumarkangas explains.

At EUR 3.5 million, the final price of the project was less than half the original estimate. How is this even possible?

“With careful calculations and analyses – numbers don’t lie. It’s also a matter of method. We take our responsibility for the sustainability of the solutions we offer very seriously. In financial leasing, the costs are distributed over a long period which means that the investment does not burden the municipality’s balance sheet, unlike when financing with a balance sheet loan,” says Janne Karaus, Development Analyst at MuniFin.

The result is no compromise

The Nopola School Centre opened its doors to the municipality’s 145 student in August. The modern school has comfortable, open spaces and rotating facilities. The teachers work in pairs and teach groups at different levels, so that each student receives instruction in accordance with their skill level. The new facilities and working methods have required some adjustment from both teachers and students, but the feedback has been very positive.

“No pain, no gain. Overall, this project has been an excellent learning experience. The entire municipality has lived and breathed this project – the Nopola school belongs to the whole municipality,” Huurmarkangas says happily.

The new school also has appeal outside the municipality of Kyyjärvi.

“We want to keep Kyyjärvi lively and dynamic and in this way create a healthy and safe place for families with children to live. I’m pleased to say we welcomed two students who are not residents of our municipality to our school this autumn,” says Huumarkangas.

Text: Heidi Penttinen
Photos: Niklas Vuorenmäki

Mitigating climate change is strongly on the agenda of the entire finance sector

The need for further cooperation and commitment became evident in the Sustainable Finance in Nordic–Baltic conference which was organised in Helsinki by Finance Finland and Finance Latvia Association in partnership with European Commission. The event took place on Friday 9 November, 2018. Around 140 public and private sector representatives from Nordic–Baltic region’s finance and investment community gathered to the event.

The discussion in the conference revolved mainly around the climate impacts of financing. However, some speakers also emphasized that financing can further also other sustainable development goals such as increased social wellbeing or gender equality.

As part of the conference programme, the conference participants will also visit MuniFin to demonstrate sustainable finance in action. MuniFin was Finland’s first green bond issuer with an inaugural green bond issue in 2016.

– There is an extremely strong and increasing investor demand for green bonds. Green loans have been very well received by the customers. With that said, we also offer a margin discount in our green lending to encourage our customers to make green investments and to compensate the extra work needed for impact reporting, said Joakim Holmström, Head of Capital Markets at MuniFin in one of the conference’s panel discussions.

Building bridges

Saara Vauramo is an Environmental Director who believes firmly in efficient public transport. Even so, she occasionally takes her own car to make her life a little easier. She advocates domestic holidays but occasionally flies to far-away sunny beaches. Recycling is also second nature to Vauramo. But she sometimes accidentally throws a banana skin in the normal bin instead of the biodegradable waste container. 

Some might say that she is a hypocrite. If you cannot live by your own standards, you cannot expect others to do so either.

But Vauramo is only human. As the Environmental Director of the City of Lahti, she puts a lot of emphasis on setting an example. For the same reason, she openly admits that she does not always do everything right herself. Sometimes she simply has to drive in order not to miss an appointment.

“Sanctimony and pedantry are not the way to sustainable solutions – being human is.”

On the whole, however, Vauramo leads a relatively eco-friendly lifestyle, and she is not alone: environmental friendliness is a natural part of the day-to-day life of many people in Lahti.

Vauramo explains that the city’s strategic goal is to be the most environmentally friendly city in Finland.

“The conditions for an ecological way of life are excellent in Lahti. The city has been promoting environmentalism for a long time, and we are now reaping tangible benefits from our efforts.”

Motivation from visible progress

Environmentalism requires a hands-on approach.

Vauramo mentions the restoration of Lake Vesijärvi as a good example of a project that is now benefiting every resident in Lahti. Lake Vesijärvi has been one of the city’s most important environmental priorities since the 1960s. It is still among the most studied lakes in the world.

“In the 1950s, 60s and 70s, many local residents did not even think of the city as being by a lake, as Vesijärvi was just a smelly pool of sludge. Long-term ecological restoration efforts, active research and cooperation between local residents and businesses have given Lake Vesijärvi back to the community.”

At the moment, the number one priority in respect of water is urban runoff management, but the City of Lahti is also investing heavily in mobility. Vauramo explains excitedly how the city is pursuing better mobility solutions with the help of a unique, EU-funded experiment involving a citizens’ cap-and-trade scheme. The scheme allows local residents to trade their emissions from transport and convert their “savings” into cheaper bus tickets or bicycle repairs, for example.

“This is the first time anywhere in the world that citizens have been given such a tangible opportunity to contribute to greenhouse gas emissions trading, which many people see as something far removed from them personally”, she says.

Vauramo sees international relations and networking as crucial elements of modern environmentalism. With increasingly easy communication, it makes sense to share thoughts and ideas with people all over the planet. Extensive cooperation with both residents and businesses is important.

“We all need to be concerned about the environment. That is why we need to talk about our ideas and share them. Today’s pioneers need networks and also the ability to rejoice when others succeed”, she says.

Meaningful work in a place to call home

The main reason why environmental issues are so high on the agenda in Lahti can be traced back to the establishment of a satellite campus of the University of Helsinki in the city. The City of Lahti itself also has a long history as a pioneer in environmentalism.

Lahti first became a part of Vauramo’s life at the end of the 1990s, when she began to study ecology there. It was not love at first sight, and moving back to Helsinki felt like the right choice for Vauramo when she graduated. A few years later, however, she was back for a post-graduate degree.

“And now this is where I love to live. I grew up in a suburb of Vantaa, but I have finally found a place to call home”, she says.

After her time at university, Vauramo went to work for the City of Lahti, first as a Development Manager and then, as of two years ago, as Environmental Director. She sees her professional role as that of a motivator who encourages others to explore new ideas boldly and open-mindedly.

Vauramo is passionate about environmentalism. Global environmental challenges are what drives her and makes her work meaningful. She also finds her work stimulating enough to put her whole heart into it: there was a period some time ago when she finished her PhD, was involved in politics, worked as a Development Manager for the City of Lahti and led the Lahti Green City project, all in the space of a few years. Her toddler-age twins completed the challenging yet rewarding period of her life.

Despite the stress and the hectic lifestyle of those years, Vauramo would not change them for the world.

“Without my experience in politics, it would have been much more difficult for me to get to grips with the business logic of public administration and the decision-making process. I have, however, wondered afterwards how I survived those years”, she says.

Childhood memories of nature never forgotten

Vauramo fell in love with nature as a little girl. She has vivid memories of blueberry picking during visits to her father’s hometown in eastern Finland.

“It was just me, the forest, blueberries and my father. Those memories run deep.”

At some point during her adolescent years, she also became interested in environmentalism. Vauramo is thankful for her family’s modest and non-consumerist lifestyle and deep and meaningful dinner-table conversations that taught her to look beyond the individual and think globally.

She has also taught her environmental values to her own children. Her children know what waste goes in which bin and not to rely on their mother to drive them to school. They make their own way to school, on foot or on bicycles.

And Vauramo’s favourite place in the world – the forest – now also has a place in her children’s hearts. The forest is a place where anyone, regardless of age, can forget about stress and deadlines for a little while.

“I am hoping that the serenity of blueberry forests also infects my children with the same passion for nature that I learned through my father”, Vauramo says.

Independent expert assessments of green projects

Saara Vauramo chairs MuniFin’s Green Evaluation Team. She likes being part of the team, as her involvement gives her a good idea about the progress that different towns and municipalities around Finland are making in respect of environmental issues.

The Green Evaluation Team is an independent body comprised of experts from outside the MuniFin organisation. The team evaluates all projects that MuniFin has chosen as potential investments. The projects are graded and compared against the highest-scoring similar projects.

“With constant new developments and increasingly strict legal requirements, the Green Evaluation Team also needs to set the bar higher and higher all the time. Projects in the green portfolio are given points to determine a margin discount according to how environmentally friendly they are in the team’s opinion”, Vauramo explains.

She wants people to remember that green bonds are also good for the project coordinators’ public image.

Examples of projects in and around Lahti that have benefited from green bonds include Lahden Talot Oy’s almost-zero-energy housing developments. These were the first housing projects financed through the green bonds scheme. Vauramo disqualifies herself from evaluations that concern projects in the Lahti area.

WHO?
Saara Vauramo

  • PhD, Urban Ecosystem Ecology
  • Born in Turku, but raised in Vantaa
  • 38 years old
  • Leader of the Green League in Lahti City Council between 2009 and 2012
  • Development Manager of the City of Lahti from 2011 until 2016
  • Environmental Director of the City of Lahti since 2016
  • Engaged with a blended family, mother of 10-year-old twins

City of Lahti shortlisted for the European Green Capital Award

Lahti’s long-term environmental efforts have not gone unnoticed. The city has been shortlisted as one of the finalists in the European Green Capital competition two years in a row.

In the latest competition cycle, Lahti was top-rated in five indicator areas: air quality, noise, nature and biodiversity, water and governance.

Text: Jaana Kosunen
Photo: Annukka Pakarinen

MuniFin’s inaugural Responsibility report has been published

Since the lending offered by MuniFin has wide direct and indirect impacts on society, responsibility has been broadly integrated in the company’s strategy. In 2017 MuniFin defined the key principles of responsibility, which have worked as a basis for the Responsibility report. Responsibility at MuniFin is based on four principles: responsible products and services, forerunner in sustainability, improving wellbeing at work and strong corporate governance.

For each key principle, MuniFin has defined indicators and goals, which are monitored annually. MuniFin promotes the achievement of almost all sustainable development goals (SDGs) set by the United Nations.

At the beginning of 2016, MuniFin launched green finance to its customers, a financial product that enables customers’ projects that support sustainable development and climate goals in Finland. During 2017, 25 projects amounting to almost EUR 600 million were added to the green portfolio. The total value of the green portfolio grew to over EUR 1 billion in the end of 2017. The estimated direct annual greenhouse gas emissions avoided for projects approved in 2017 totals approximately 19,400 tons of CO2.

– During the past years we have noticed that the demand for responsible investments is growing fast. We hope that these reports give a new and transparent picture of our responsible operations and commitment in achieving the domestic climate goals, says Esa Kallio, President and CEO at MuniFin.

More information:

Responsibility

Esa Kallio, President and CEO, MuniFin, tel. +348 50 337 7953, esa.kallio(at)munifin.fi

Antti Kontio, Head of Corporate Responsibility, MuniFin, tel. +358 50 370 0285, antti.kontio(at)munifin.fi

MuniFin’s new Responsibility Policy has been published

The Responsibility Policy is a part of MuniFin’s long-term strategy in responsibility. Skillful and responsible personnel that profoundly understand the impacts of MuniFin’s operations and are committed to promoting long-term goals are at the core of the new policy. The policy also serves as a key external policy for stakeholders such as owners, customers, investors, authorities, the media and other stakeholders.

– We are committed to understanding, monitoring and managing the social and environmental impacts of our own operations and the products and services that we offer in order to contribute to the wider goals for sustainable development in the Finnish society. This engagement is integrated in our strategy and values, says Esa Kallio, CEO (interim) at MuniFin.

The Responsibility Policy can be found here >.

More information

Esa Kallio, CEO (interim)
tel. +358 50 337 7953

Green finance exceeds EUR 1.0 billion

MuniFin’s green portfolio is highly concentrated on two sectors: public transportation and sustainable buildings. The largest individual projects are the Western metro extension and Tampere tramway, most typical project being a school building. In 2017, first residential buildings in social housing were added in the portfolio. 

The new product has been well received in the MuniFin’s customer base. Municipalities have significant potential in achieving Finland’s long-term climate goals and MuniFin wants to support this development by offering a margin discount. Impact reporting for green finance will be published annually.

Responsible investments will be launched in 2018

In 2017 MuniFin decided to establish a portfolio for responsible investments. The socially responsible investments (SRI) portfolio will be launched in 2018 and its target size is directly linked to the total amount of outstanding green bonds. In addition, MuniFin monitors all investments through a quarterly calculated ESG score.

Further information:

Antti Kontio, Head of CSR, tel. +358 50 3700 285, antti.kontio(at)munifin.fi

MuniFin issued an inaugural green private placement

Previously MuniFin has issued two publicly traded green bonds. The public green bond transactions were issued in 2016 and 2017, sized at USD 500 million and EUR 500 million respectively.

The first private transaction, arranged between MuniFin and Fukoku Life, highlights both the issuer’s and investor’s commitment to the development of the green bond market.  

– Fukoku Life is very pleased to be the first institutional investor to subscribe to MuniFin’s Green Bond program in private placement format, and thereby contribute to further reduce greenhouse gas emissions and improve energy efficiency in Finland. “Contribution to Society” is one of Fukoku Life’s management philosophy. Thus, this investment is an emblematic example of our social and environmental consideration, not only in Japan but also worldwide, comments Takehiko Watabe, CIO, Fukoku Mutual Life Insurance Company.

– We are delighted to cooperate with Fukoku Life, a prime Japanese ESG investor. This transaction emphasises MuniFin’s long-term presence and commitment to the Japanese market. Hence, we are particularly pleased to offer our green bonds to the Japanese institutional investor base, says Esa Kallio, President and CEO (interim), Head of Capital Markets, MuniFin.

The transaction was arranged by Crédit Agricole CIB.

– MuniFin Green Bonds framework has been drafted according to the Green Bond Principle and a second opinion has been given by both the Stockholm Environment Institute and CICERO. MuniFin chose a very strong selection process for eligible projects by putting in place an independent Green Loan Committee which evaluates, approves or declines and grades each projects. The involvement of Fukoku Life in supporting MuniFin’s Green Bond Framework highlights a strong endorsement of their policy, comments Tanguy Claquin, Global Head of Sustainable Banking at Crédit Agricole CIB.

Further information:

Joakim Holmström
Vice President, Head of Funding, MuniFin
joakim.holmstrom(at)munifin.fi
tel. +358 9 6803 5674

Antti Kontio
Funding Manager & Head of Corporate Responsibility, MuniFin
antti.kontio(at)munifin.fi
tel. +358 9 6803 5634

Nordic issuers release guide on green bonds impact reporting

The paper has been developed by a working group comprising public sector green bond issuers from the four Nordic countries Denmark, Finland, Norway and Sweden. They include the local government funding agencies Kommunalbanken (Norway), Kommuninvest (Sweden) and MuniFin (Finland); the Swedish Export Credit Corporation (SEK); and six Swedish municipal or regional issuers including City of Gothenburg, the municipalities of Lund, Norrköping and Örebro, Region Skåne and Stockholm County Council. Denmark’s municipal lending agency KommuneKredit has been part of the working group but intends to comply at a later stage.

The idea of a harmonised approach to impact reporting came up as Kommuninvest prepared its reporting after launching its debut green bond in 2016. Realising that there would be benefits both to issuers and to investors from a harmonisation of impact reporting efforts, Kommuninvest initiated a working group together with other Nordic issuers.

– What characterises Nordic public sector issuers of green bonds is that we finance projects across a range of categories and sizes, and that we have a limited number of people available to work with environmental reporting. There are some guidelines on impact reporting available in the market today, but we felt a degree of tailoring to regional market and portfolio characteristics were necessary to deliver meaningful reporting, says Björn Bergstrand, Head of Sustainability at Kommuninvest.

– Through this group harmonisation initiative, we ensure transparency and consistency in reporting from the Nordic public sector green bond market. We hope this guide will be useful to other green bond issuers in the Nordic region as well as in other geographies, and to the investor community. We believe it raises the bar for green bonds impact reporting, and we encourage other issuers to build on this so that the market may continue to advance, says Bergstrand.

The paper proposes an outline for reporting environmental benefits of green bond investments. It provides guidance on general matters such as to report on actual impact when feasible, to distinguish between reduced and avoided emissions, and to report impact in relation to the share financed by green bonds. The paper also recommends issuers to report impact in relation to amounts disbursed and outstanding, as opposed to amounts committed.

– This means that if disbursements to a project are made gradually, environmental impact will also be taken into account gradually. Amortisations will gradually reduce the issuer’s reported environmental impact of a project, but will free up capacity to finance new projects, says Bergstrand.

The paper furthermore provides suggestions for metrics and indicators relevant to eight different project categories. This effort builds upon reporting approaches suggested by the Green Bond Principles and multilateral development banks, but adds indicators for categories such as clean transportation and green buildings, that have previously not been addressed.

As a first step toward approaching social impact, the paper includes a few social impact indicators on a ‘nice to have’ basis.

The paper has benefited from input from CICERO Center for International Climate Research, the Nordic Investment Bank, SEB, and Crédit Agricole CIB as well as several investors throughout the process.

The issuer group intends to manage the position paper as a live document, to be updated on a regular basis. The group encourages feedback and will seek to develop its methodology to provide as relevant and appropriate impact reporting as possible. Events to introduce the paper to issuers and investors are planned for a number of cities, with Frankfurt, London, Paris and Stockholm confirmed at time of the launch.

The position paper will be available for download on the signatories’ web pages such as www.munifin.fi, www.kommuninvest.org and www.kommunalbanken.no from 18.00 hrs CET on October 24, 2017.

Comment from Chris Wigley, Senior Portfolio Manager, Mirova:

– This new paper on impact reporting is in tune with the current movement towards greater transparency. It is thoughtful and innovative, and advances research in this field to yet another milestone.

Comment from Christa Clapp, Research Director of Climate Finance, CICERO:

– This impact reporting initiative is impressive, timely and highly welcome. It will clearly facilitate a harmonisation of impact reports in the green bond market. It will also hopefully trigger discussions on how to present impacts to investors when these are not easy to assess.

Comment from Ulf Erlandsson, Senior Portfolio Manager, Strukturinvest Fondkommission:

– We think the Nordic public sector issuers’ position paper is a very effective document for lowering the barriers to issue green bonds. Alignment of green metrics, such as those suggested in this document, also greatly simplifies the green due diligence required for investors to invest.

Comment from Tanquy Claquin, Head of Sustainable Banking, Crédit Agricole CIB:

– Transparency, reliability and consistency of data are critical to further expand the green bond market and sustainable finance in general. In this respect, this Nordic public sector issuers’ initiative is tremendously helpful. It will serve issuers, well outside of the group signatories, and contribute to better practices and exemplarity in the market in general.

Comment from Christopher Flensburg, Head of Climate & Sustainable Financial Solutions, SEB:

– This position paper is an important milestone in securing a better dialogue and enables investors to understand the impact of their investments. It is initiatives like this which will allow finance to proactively contribute to building sustainable societies.

Further information:

Kommuninvest (Secretariat for Position Paper and main contact for questions & comments)
Björn Bergstrand, Head of Sustainability and Senior Investor Relations Manager, +46 708 86 94 76, e-mail: bjorn.bergstrand(at)kommuninvest.se

Kommunalbanken
Sigbjørn Birkeland, Chief Financial Markets Officer, +47 934 80 893, e-mail: sib(at)kbn.org

MuniFin
Antti Kontio, Head of Corporate Responsibility and Manager, Funding, + 358 9 6803 5634, e-mail: antti.kontio(at)munifin.fi

Stockholm County Council
Frida Korneliusson, CEO, Treasury of Stockholm County Council, + 46 707 37 44 20 e-mail: frida.korneliusson(at)sll.se

Extremely strong investor demand for MuniFin’s inaugural EUR green bond

– We did expect a marked oversubscription as the demand for responsible investments is currently growing. MuniFin enjoys an excellent reputation among investors, and our green framework received a very positive welcome in investor meetings prior to the issue, says Joakim Holmström, Vice President, Head of Funding at MuniFin.

This is by far the most sought after benchmark in the history of MuniFin both measured by the size of the bond. Almost 100 investors participated, which is more than for any other benchmark bond previously offered by MuniFin.

The decision to enter the green bonds market was a strategic one for MuniFin. These bonds can help MuniFin to expand its international investor base while at the same time allowing MuniFin to accelerate the sustainable investments the Finnish municipal sector makes.

A flying start for green financing

MuniFin has offered green financing for its customers’ environmental investments since spring 2016. The project portfolio is currently approaching EUR 1 billion.

– We can already see how the margin discount we offer for these projects is guiding our customers towards more ecological choices when they plan their investments, says Antti Kontio, Manager, Funding and Head of Corporate Responsibility at MuniFin.

MuniFin intends to continue issuing green bonds on a regular basis. The size of the bonds and issuance frequency will depend on the demand for green financing. So far, the demand has been a positive surprise for MuniFin. In the future, sustainable and low-carbon construction projects are expected to account for the most significant growth in the portfolio.

– From the climate impact perspective, we would like to see more renewable energy projects in our portfolio, Antti Kontio comments.

Transaction information

MuniFin’s second green bond was priced on 26 September 2017 and its value date is October 3, 2017. The 500 million 10-year bond was priced 7 basis points below mid-swaps. Fixed coupon for investors is 0.75 % and price 99.724%. The book reached EUR 2.8 billion before closing at 10am CET on 26 September 2017.

The investor base was primarily European. Germany accounted for 24%, Nordics 22%, France 13%, Asia 12% and other Europe 29%. Banks were the largest investor group for 44% followed by insurance/pension funds 25%, central banks and official institutions 20% and asset managers 10%.

Lead arrangers of the bond were BnP Paribas, Credit Agricole CIB, DZ Bank and Nordea.

What is green financing?

Projects for the green portfolio are selected by an external Green Evaluation Team comprised of environmental experts. The selected projects must meet the criteria set forth in MuniFin’s Green Bonds Framework. Projects are given a discount on the margin, depending on the scope of their environmental impacts.

Green projects granted financing >

Further information:

Joakim Holmström, Vice President, Head of Funding
Tel. +358 50 4443 638,  joakim.holmstrom@kuntarahoitus.fi

Antti Kontio, Manager, Funding, Head of Corporate Responsibility
Tel. +358 50 3700 285, antti.kontio@kuntarahoitus.fi