16 september 2016

NIB buys green bonds in cooperation with arranging banks

The Nordic Investment Bank (NIB) has agreed to cooperate with Handelsbanken, Nordea and SEB as arrangers for green bond issuing.

The cooperation helps NIB to support the green bond market and develop the financing of environmental projects.

As a long-term lender and issuer of environmental bonds, NIB wants to support the green bond market, which finances projects with positive environmental impacts, such as contributing to climate change mitigation. 

NIB has extensive experience in evaluating the environmental impact of all projects it lends to, which benefits the assessment of underlying projects financed by NIB-purchased green bonds. Recently, NIB allocated EUR 500 million for investments in green bonds issued by companies and municipalities in the Nordic-Baltic region. 

«Purchasing green bonds fits well with the part of NIB’s mandate that focuses on financing projects that improve the environment», says Thomas Wrangdahl, Head of Lending at NIB. 

Green bonds are typically issued with the involvement of arranging banks assisting the issuing corporate entity. As a rule NIB will itself evaluate the environmental impact before investing in a new green bond, but in some cases there are time constraints. Thus, it is important that arrangers with whom NIB cooperates know what purposes the bond proceeds are being used for and whether the issuance would be eligible for NIB to invest in. 

With the arranging banks, NIB has discussed their green bond issuing policies, procedures and awareness of NIB’s mandate. 

«This cooperation with bond arrangers allows NIB to follow its strict requirements for investing while being able to react to the rapid decision-making required for investing in green bonds», says Lars Eibeholm, Head of Treasury at NIB. «We look forward to cooperating with other arranging banks, as well», he adds. 

NIB is a member of the Green Bond Principles (GBP) Executive Committee, a group within the International Capital Markets Association (ICMA). 

Mr Tobias Lindbergh, Head of Sustainable Finance at Handelsbanken Debt Capital Markets says: » NIB has considerable experience in evaluating environmental impacts and as a long standing issuer of environmental bonds NIB certainly brings a wealth of knowledge to the market place.» 

Mr Kamal Grossard-Amin, Director of Debt Capital Markets at Nordea Markets, says:

«This initiative is an illustration of the vivid importance NIB puts on developing the green bond market and the central role NIB takes upon itself to drive sustainable financing even further. Nordea is honoured to become part of this cooperation, as we are similarly committed to high sustainability standards and supporting the positive development of the green bond market.» 

Mr Christopher Flensborg, Head of Sustainable Products and Product Development, Fixed Income and DCM at SEB says: «NIB has since its inception worked dedicated with environmental assessment of their financing and for SEB, with its strong commitment and engagement, there is a lot to learn from NIB.»