Municipality of Norrköping Green Bond Impact Report

As of 31 December 2017

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Clean Water and Sanitation

Affordable and Clean Energy

Industry, Innovation and Infrastructure

Sustainable Cities and Communities

Climate Action

Responsible Consumption and Production

Life on Land

Life below Water

In October 2016 the Municipality of Norrköping issued its fi rst Green Bond supporting the transition to a low-carbon and climate resilient society. Th is fi rst Green Bond transaction amounted to 600 million SEK and the funds are earmarked and dedicated to fi nance green projects defi ned within the Municipality´s framework for Green Bonds.

Eligible Green Bonds projects are projects in fi elds such as renewable energy, energy effi ciency, public transportation, waste management and sustainable buildings.

Th e Municipality of Norrköping’s Green Bonds Framework addresses eight of the UN Sustainable Development Goals:

Green Bond IssuancesIn collaboration with SEB the municipality of Norrköping established a framework for Green Bonds in the spring of 2016. Green Bonds can be used to fi nance new projects or to refi nance eligible projects in accordance with the Green Bond Framework. Th e ambition is to use the

majority of the Green Bonds to fi nance new projects (projects that have been fi nalized within one year before the time of the issuance of the Green Bonds and forward). Eligible projects include projects that target the following areas:

■ Renewable energy (wind, solar, geothermal and biogas from waste).■ Energy effi ciency improvements in existing buildings, activities and operations such as

new control technology, ventilation systems and lighting. Minor renovations of buildings (e.g. window replacement) leading to effi ciency improvements of at least a 35 per cent compared to existing technology can also be included.

■ Sustainable public and individual transportation with renewable fuels and related infra-structure.

■ Sustainable buildings: 1. New buildings with at least 25 per cent less energy use per m2 and year than

required by applicable regulations (Boverkets byggregler, BBR) and preferably a minimum certifi cation of either LEED gold, BREEAM very good, Miljöbyggnad silver or Svanen.

2. Major renovations leading to at least a 35 per cent reduction in energy use per m2 and year.

■ Waste management (recycling and re-use, rehabilitation of contaminated areas).■ Water management.■ Climate change adaptation in buildings, infrastructure and sensitive surroundings.

Sustainable Environment (max 20 per cent)■ Nature conservation.■ Biodiversity. ■ Development of non-toxic environments. ■ Climate-friendly and in-house prepared meals for pupils and elderly. ■ Sustainable agriculture.

Green Bond Framework

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Th e Municipality of Norrköping will not fi nance nuclear or fossil fuels projects through its Green Bonds.

In April 2016, CICERO, an independent research institute at the University of Oslo, issued a Second Opinion regarding the Municipality of Norrköping’s framework for Green Bonds. In CICERO´s evaluation it´s concluded that Norrköping’s framework provides a detailed and sound framework for climate-friendly investments promoting a transition to low-carbon and climate-resilient growth and is supported by a strong governance structure. CICERO’s Second Opinions are graded dark green, medium green or light green, refl ecting the climate and

environmental ambitions of the bonds and the robustness of the governance structure of the Green Bond Framework. Cicero’s conclusion regarding the Municipality of Norrköping’s Green Bond Framework was:

In order to identify Green Bond eligible projects a working group with environmental expertise, fi nance expertise and representatives from the municipal units and companies has been formed. Th is working group makes a fi rst selection of potential Green Bond projects. After the fi rst screening eligible projects are approved by the Finance department and the Environmental Controller at the Analysis and development unit.

Th e Municipality of Norrköping is part of a group of Nordic public sector issuers of green bonds1 which during 2016 initiated discussions regarding a joint common approach to green bonds impact reporting. Th is was done in the belief that a common Nordic position to the issues involved may be benefi cial to other green bond issuers as well as the investor community. Issuers also believe that sharing experiences and know-how will benefi t all as individual issuers.

Th e purpose of the work is to develop a transparent, harmonized and relevant approach to report impact from green bonds. A guide for Nordic green bond issuers was published in 2017 and this impact report is based on the principles of the guideline.

1 Signatories (FI=Finland, NO=Norway, SE=Sweden): City of Göteborg (SE), Kommunalbanken (NO), Kommuninvest (SE), Municipality Finance (FI), City of Lund (SE), Municipality of Norrköping (SE), Municipality of Örebro (SE), Skåne County Council (SE), Region Skåne (SE) Stockholm County Council, SLL (SE), Swedish Export Credit Corporation, SEK (SE)

Th is impact report illustrates the progress of the projects fi nanced with the Municipality of Norrköping’s Green Bond along with the positive climate and environmental impacts that have resulted or are projected to result from the projects. To measure the impacts of the Green Bond projects diff erent indicators, relevant for the project, are used such as indicators for energy savings, energy effi ciency, GHG (greenhouse gas) emissions, GHG avoided and share of energy from renewable sources.

Th e Municipality of Norrköping issued its fi rst Green Bond in October 2016. In 2017 three out of four fi nanced projects were fi nalized. Still this report is more focused on the projected results and a follow up on actual result will be done in 2018.

”Based on an overall assessment of the activities that will be fi nanced by the green bond, the Municipality of Norrköping’s Green Bond Framework gets the Dark Green shading.”

Selection process

Joint Position Paper on Green Bond Impact Reporting

Impact reporting

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The municipal real estate company Hyresbostäder, in cooperation with Klövern real estate Company, develops rental housing blocks which will contain university student apartments, standard apartments for university employees, offices and business premises on the ground floor.

The apartments will be distributed in two different buildings. One consisting of 72 student housings and one consisting of 43 traditional rental apartments. In the third building, Klövern will have office space and commercial premises on the ground floor. The estimated BTA, the gross area, for the whole project is about 17.100 m2 and BOA/LOA (living area/local area) about 11.700 m2. Energy consumption is estimated to 67 kWh/

m2. The ambition is to meet the criteria of the Miljöbyggnad Silver which means reduced energy use by at least 25 per cent compared with the BBR 21.

The construction work has started but is still ongoing. For that reason there’s no actual impact to report in 2017 but the estimated performance presented above is still valid. Estimated investment is 330 million SEK. The project is 100 per cent financed by the Municipality of Norrköping’s Green Bond.

Kopparhammaren 2Green Bond eligible projects The Municipality of Norrköping’s first Green Bond finances four different projects.

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Street LightningDuring the period 2011-2017 the technical office in Norrköping conducted an exchange of all luminaire in street lighting to LED lighting. Through the change an energy efficient lighting was achieved, but it was also an improvement in lighting performance and color reproduction and reduced the service requirements of the luminaire.

In 2011 the energy consumption was 12,000 MWh and when the whole luminaire was replaced in 2017 the energy consumption was decreased to 7331 MWh. In parallel with the

change of the luminaire the number of spots increased with over 3000 pieces, which means that the project resulted in an energy efficiency of about 46 per cent.

Project investment is 60 million SEK.

In the autumn of 2016 the Municipality of Norrköping introduced multi-compartment containers for all households in detached houses and vacation homes. The system is voluntary and contains sorting out the normal household waste (food waste and compostable waste) as well as newspapers, packaging waste, batteries and light sources, a total of 10 fractions collected directly at the property. The acceptance rate is at almost 80 per cent.

The fundamental benefit of recycling is improving the management of energy and natural resources compared with manufacturing based on new raw materials. Experience from an initial follow-up but also from an earlier pilot project shows that the amounts of recycled materials per household increases by 2-3 times compared to the amounts received through the recycling stations. The improvement differs between the different materials.

Through the increased recycling, the expected reduction of carbon dioxide emissions is about 2,500 CO2 equivalents/year. In addition, the household collecting also has a positive effect on the traffic-related emissions.

Counted as CO2 equivalents the municipal collection via multiple compartment containers cause about 50 tons per year while private car traffic with the same purpose cause about 300 tons. This is calculated from a scenario of visiting the recycling station once a month. Would you rather go to the recycling station twice per month, which is more realistic, it will cause emissions in the order of 600 tons per year.

Total project investment is 64 464 096 SEK.

Introduction of multi-compartment containers

Photo: Brita Nordholm

PROJECTS

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Röjningen 3:1

Norrevo properties is constructing a new home for the elderly in the district of Åby. The building is on four floors with an attic and contains 60 apartments, a kitchen and an office. The BOA/LOA (living area/local area) is estimated to 7650 m2 where 3963 m2 are classified as office space and 3687 m2 for housing. Energy consumption is estimated to 56,6 kWh/m2 per year, which means around 33 per cent less energy use compared to BBR 21.

The building was completed in November 2017 and the energy performance will be followed up and measured during 2018. Investment cost is 144 354 000 SEK.

SummaryImpact report 2017

PROJECTS

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Key procedural aspects■ Each project is selected according to Norrkoping’s Green Bonds Framework. The Green

Bonds Framework is available on www.norrkoping.se/organisation/ekonomi/grona-obli-gationer.

■ The municipality of Norrköping reports on a portfolio basis, and in Swedish kronor (SEK).

■ For this document, the reporting period ends on 31 December 2017.

Key reporting methodology■ The municipality of Norrköping reports its Green Bond impact in accordance with the

Nordic Public Sector Issuers: Position paper on Green Bonds Impact Reporting.■ The municipality of Norrköping reports the results on the basis of the share of the pro-

ject’s total investment cost financed with green bonds.■ Impacts are based on outstanding disbursed amounts to projects.■ Total amounts committed are indicated for reference.■ The CO2 impact will be reported based on ex-post outcomes when the projects are

finalized.

Project

Koppar- hammaren 2

Street lightning

Multi- compartment containers

Röjningen 3:1

Category

Sustainable buildings

Energy efficiency

Waste management

Sustainable buildings

Main environ- mental benefit

25 % less energy use per m2 and year than required by BBR.

More efficient energy use.

Increased recycling and improved management of energy and natural resources.

33 % less energy use per m2 and year than required by BBR.

Estimated cost

330 000 000 SEK

60 000 000 SEK

65 000 000 SEK

145 000 000 SEK

Outstanding dis-bursed amounts to projects per 20171231

52 575 455 SEK

60 000 000 SEK

64 464 096 SEK

144 354 000 SEK

Share financed by the green bond

100%

100%

100%

100%

SUMMARY

Vision 2035COLOURFUL NORRKÖPING HAS CONFIDENCE IN THE FUTURE

By 2035 Norrköping will be one of the main environmentalmunicipalities with 175,000 inhabitants. All children and youngpeople here are hopeful about the future. Entrepreneurship andindustry are stimulated in an innovative environment that attractstalent and students with its breadth and edge. Top class industryand university, quite simply.

Experiences and proud environments here create an unequalledquality of life. Norrköping is a leading cultural city and the musiccapital of Sweden.

Together we can create our colourful Norrköping, with respectfor the city’s soul, and with courage and imagination.

KOMMUNSTYRELSENS KONTOR Adress: Rådhuset, 601 81 NorrköpingTel: 011-15 00 00E-post: norrkoping.kommun@norrkoping.sewww.norrkoping.se