Green Bond IMPACT REPORT
June 2016
City of Gothenburg Green Bond Impact Report 2016 2
The City of Gothenburg’s Green Bond eligible projects promote the transition to a low-carbon
and climate resilient society. Some project examples include:
Sustainable housing – Förvaltnings AB Framtiden In 2015 four new construction projects were completed. Three of these buildings are certified with the eco label Svanen, which means stringent requirements are placed on construction process, materials and energy use. The fourth building has an ambitious goal of an energy consumption not exceeding 60 kWh/m² and year. On average the houses use approximately 33% less energy compared to law requirements (BBR).
Constructed area:
13 800 m²
Energy savings:
33 %
GoBiGas – Göteborg Energi Gothenburg Biomass Gasification (GoBiGas), a concept facility for large scale production of biogas is now in continuous operation. As expected in the startup phase, the result for 2015 is still quite modest. The facility has the capacity to produce 180 GWh/year in the future. In 2016, production is projected to be doubled (60 GWh), resulting in approximately 12 000 tons of avoided CO2 emissions.
GHG emissions avoided
(2015): 5900 tons
Produced (2015):
26 500 MWh
Ultrafilter – Department of Sustainable Waste and Water To increase the purification efficiency of the waterworks in Lackarebäck, ultrafilters have been installed. The purpose of the investment is to assure that clean drinking water of the highest quality is provided for all citizens. The ultrafilter will work in conjunction with the already existing water treatment systems. The effects of the investment can be measured in the amount of sick days avoided for the population in case of a possible waterborne disease outbreak in the future.
Sick days avoided:
39 400/year
Capacity:
100 % of water passing
through processed
City of Gothenburg Green Bond Impact Report 2016 3
Green Bond Issuances Since October 3, 2013, the City of Gothenburg has issued Green Bonds on three occasions raising a total of
SEK 3,36 billion of funding supporting the transition to a low-carbon and climate resilient society. At the
time of publication approximately nine percent of the city’s debt consists of Green Bonds.
The City of Gothenburg’s responsibilities, including its climate and environmental work, spans many
different areas. This diversity is reflected in the city's portfolio of Green Bond eligible projects. In
accordance with the city’s extensive and ambitious Environmental and Climate Programmes the Green
Bonds are issued, aimed at financing projects in fields such as renewable energy, energy efficiency, public
transportation, waste management, water treatment and sustainable housing.
On June 23, 2015, the city issued its third Green Bond and the transaction amounted to SEK 1,05 billion.
The funds from the Green Bonds are earmarked and dedicated to finance green projects defined within
the city's framework for green bonds. The interest from the market has been strong and green bonds as a
phenomenon continues to grow.
Green Bond Issuance by year (SEK bn)
The City of Gothenburg continues to receive high credit ratings:
Aaa, from Moody’s (since 2006) AA+, from Standard and Poor’s (since 2007)
Both ratings have stable outlooks. The City of Gothenburg's strong financial management, strong budgetary flexibility and low contingent liabilities are highlighted in the credit rating reports. Other positive conditions include a very strong local economy, strong liquidity and a predictable and supportive institutional framework.
Approach to impact reporting There are currently no established
standards or models in regards to impact
reporting of projects financed with Green
Bonds. The City of Gothenburg is
continuously working on developing and
improving the methods of reporting the
climate and environmental impacts of its
projects financed with Green Bonds to its
investors. The city is also actively
contributing to harmonization efforts
regarding impact reporting of Green
Bonds.
The following principles and guidelines
have been considered when creating this
impact report:
The Green Bond Principles (March
2015)
Green Bonds Harmonized
Framework for Impact Reporting
(December 2015)
Investor Network on Climate Risk:
Statement of Investor Expectations
for the Green Bond Market
(February 2015)
Conservative estimates are employed to avoid overstatement of the projects financed with Green Bonds climate and environmental benefits. Transparency is of particular importance to the City of Gothenburg in regards to reporting the impacts of the projects. A disclosure of methodologies and key underlying assumptions including calculations, conversions and baselines that have been employed to increase comparability will be provided in the Annex.
0,5
1,81
1,05
0
0,5
1
1,5
2
2013 2014 2015
City of Gothenburg’s Green Bonds
SEK bn Emitted Maturity ISIN
0,25 13-10-03 19-10-03 XS0976165828
0,25 13-10-03 19-10-03 XS0976166719
1,5 14-06-03 20-06-03 XS1073521988
0,31 14-06-03 20-06-03 XS1073488675
1,05 15-06-30 21-06-03 XS1253847815
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City of Gothenburg Green Bond Impact Report 2016 4
Green Bond eligible projects The proceeds from Green Bonds are used to finance projects defined within the city's framework for Green Bonds. Eligible Projects may include projects that target:
Mitigation Adaption Environment
Mitigation of climate change, including investments in low-carbon and clean technologies, such as energy efficiency and renewable energy programs and projects.
Adaptation to climate change, including investments in climate-resilient growth
To a smaller extent (max 20%), projects which are related to a sustainable environment rather than directly climate related can be included.
The framework established by the City of Gothenburg constitutes the basis for the city’s work with Green Bonds. In 2015, the requirements for projects financed within the framework for Green Bonds were specified even further. This was done in order to assure that there are clear and concrete requirements placed upon the projects. Projects within the sectors included in the table below are eligible for financing under the framework. If a project covers multiple sectors, the project is only included in the main sector, but target results will include all components of the project.
Sectors eligible for financing under the framework
Renewable energy (solar, wind, wave, bio, waste and hydro)
Energy efficiency
Waste management
Water management
Biofuel
Smart grids
Sustainable transportation (e.g. public transport, cycle and shipping infrastructure)
Sustainable housing (e.g. infrastructure and construction)
Environmental (max 20%) Biodiversity Water clearing facilities Air pollution Chemicals
On March 12, 2015, CICERO, an independent research institute at the University of Oslo, issued a second opinion regarding the city's framework for Green Bonds. In the evaluation published by CICERO it is concluded that the City of Gothenburg is taking important steps to reduce the city's carbon and environmental footprint. The city's framework and supporting environmental policies are described as transparent, comprehensive, long-term and robust. CICERO's previous evaluation of the city's work with Green Bonds was published in July 2013 and is publicly available on the City of Gothenburg website.
Adaption
19,20%
Mitigation
75,51%
Environment
5,29%
Energy
efficiency
2%
Water
management
19%
Biofuel
31%
Sustainable
transportation
6%
Sustainable
housing
36%
Environmental
6%
Distribution of projects by sector 2013-2015 Distribution of projects by category 2013-2015
City of Gothenburg Green Bond Impact Report 2016 5
Selection process In order to identify Green Bond eligible projects a rigorous review and approval process is in place to
ensure that the projects are in line with the city's framework for Green Bonds and thus targeting
mitigation of and adaption to the effects of climate change and other important environmental aspects. A
working group with expertise on climate change, the environment, financial markets and financial
instruments are involved in the selection process ensuring both green and secure investments.
Following dialogue with administrations and municipal companies within the city, the City Executive
Office (Stadsledningskontoret) selects projects in accordance with the city's Environmental and Climate
Programmes and the city's framework for Green Bonds. The Environmental Administration
(Miljöförvaltningen) provides expertise and verifies the selections made by the City Executive Office. The
City Executive Office then presents the final selection of projects eligible for financing with Green Bonds to
the City Executive Board (Kommunstyrelsen) for approval.
The statuses of the Green Bond eligible projects are monitored and the City Executive Office reports
results back to investors annually.
More information about the City of Gothenburg’s Green Bond issuances and its environmental and climate
work, both on a domestic and international level can be found in the annual Green Bond Investor Report
and the city’s Environmental and Climate Programmes on the City of Gothenburg website.
Project evaluation and selection
• City of Gothenburg's Environmental and Climate Programme
• Rigorous review and approval process
Management of proceeds
• Green Bond special account holding proceeds from Green Bonds
• Annual Investor Report show preliminary allocation to each project for the coming year
• Proceeds are allocated annually once the final numbers allocated to each project are verified
Impact measurement and reporting
• Estimates of significant reductions in GHG emissions from projects
• Reporting of other significant indicators where possible
• Active contribution to the harmonization efforts regarding impact reporting of Green Bonds
Eligibility criteria and use of proceeds
• Framework targeting sectors and projects with positive effects on climate and environment
• Framework reviewed by a second party (CICERO)
• Framework specified in 2015
City of Gothenburg Green Bond Impact Report 2016 6
Methodology and how to interpret the results
The purpose of this impact report is to illustrate the positive climate and environmental impacts that have
resulted or are projected to result from projects financed within the City of Gothenburg's framework for
Green Bonds. The City of Gothenburg is committed to transparent reporting and conservative assessments
when reporting these results. A variety of key result indicators including four core indicators targeting
energy savings, the production of energy, increased capacity of energy production and reduced/avoided
GHG emissions have been selected and where possible quantified. However, it is important to consider the
following aspects in order to adequately interpret the reported results:
Uncertainty and comparability: Estimations of impact indicators and projections of impacts are
based on certain assumptions. The City of Gothenburg aims to make sound, conservative and
reasonable assumptions based on current information. However, it is important to note that actual
results may diverge from initial projections as a result of changes in law requirements, baseline
conditions, behavior and slow start-up periods.
Qualitative results: The projects listed within this report may have impacts across a much wider
range of indicators than those included in this report. It is therefore advisable to not only focus on the
reported quantitative indicators since other important impacts may be left out. Where quantitative
data is unavailable, qualitative data, to the extent possible have been included to illustrate the type
and direction of other beneficial impacts. To provide the best possible understanding of each project
and its impacts, project descriptions which include some of the most important aspects of each project
are available in the annual Investor Report.
Ex-ante and ex-post: Both impact analysis (ex-ante) and impact reporting (ex-post) will be used to
report the impacts of a project. The aim is to report actual results where possible as well as providing
an assessment of the results that can be expected from financed projects in the future. The impact
analysis is an integral part of the selection process when determining if a project is eligible for
financing with a Green Bond.
The impact indicators summarized in this report focus on results considered by the City Executive Office
and Environmental Department to be of interest to Green Bond investors, based on a dialogue with both
investors and project operations. The indicators are intended to illustrate the type and scale of expected
results in a variety of projects. It is important to note that, because of the wide range of project areas,
comparability between projects (and other project portfolios) may be limited. An aggregation of the GHG
emission reductions from different projects will not be provided until there are more harmonized and
developed methods for GHG accounting in regards to Green Bond eligible projects.
The City of Gothenburg's Green Bond eligible projects are presented in two different tables. Table 1
includes projects mainly focused on energy efficiency, renewable energy and reduction of GHG emissions.
In Table 2 other projects are presented, accompanied with suitable quantitative and/or qualitative
indicators. A disclosure of methodologies and key underlying assumptions including calculations,
conversions and baselines that have been employed to increase comparability is provided in the Annex.
Key Result Indicators
Table 1 Annual energy savings in MWh
Annual GHG emissions reduced/avoided in tons of CO2 equivalent
Annual renewable energy generation in MWh
Capacity of renewable energy plant(s) constructed or rehabilitated (MW)
Other significant results and aspects
Table 2 Projects categorized in other sectors are more heterogeneous. The impact report provides project specific indicators based on available information that provides an indication of the type and scale of the results.
City of Gothenburg Green Bond Impact Report 2016 7
1. Renewable energy, energy efficiency, GHG reduction focused projects
Impacts and allocated amounts
Project Administration/
Municipal
company
Project
start
Adaption/
Mitigation/
Environment
Sector Annual
energy
savings
MWh
(%)
Annual
energy
produced
MWh
Renewable
capacity
added MW
Annual
GHG
emissions
avoided
tons of
CO2 eq.
Other results Allocated
(MSEK)
GoBiGas
Göteborg Energi AB
2013 M Biofuel na 26 500 na 5900 Capacity: 180 GWh Energy production projected to be doubled
in 2016 (~60 GWh with 12 000 tons of CO2 emissions avoided).
920
Electric cars
Gatubolaget AB 2013 M Sustainable transportation (Energy efficiency)
na na na 148 Approximately 200 new electric cars, 51 electric bikes and several small electric vehicles have been purchased since project start. Benefits from bikes/small vehicles are not included.
59,9
Celsius
Göteborg Energi AB
2014 M Energy efficiency (Renewable energy)
- na na 500* Project promotes the use and optimization of district heating technology in Europe.
Power requirements for heating can be reduced by up to 90 % with this technology.
5
Traffic lights energy efficiency
Road Traffic Administration
2015 M Energy efficiency
1232 (51%)
na na 424 Replacements of ineffective fittings have resulted in energy savings of 51%.
48,9
Sustainable housing
City Premises Administration
2014 M Sustainable housing
- (34%)
na na - A total of 17 buildings constructed. They use green electricity (~100 % reduction in CO2 emissions from electricity use).
Estimated energy use ~34 % lower than baseline. Estimations show 50-60 tons of CO2 emissions will be avoided annually.
695,5
Sustainable housing
Förvaltnings AB Framtiden
2015 M Sustainable housing
410 (33%)
na na 106 Three constructions with the eco label Svanen constructed and one low-energy house. The buildings use electricity certified with the eco label Bra Miljöval (Wind and hydro). Energy use 33 % lower than baseline.
388,1
Total allocated 2117,4
na = Not applicable
- = Not reported for this project
*Projected
City of Gothenburg Green Bond Impact Report 2016 8
2. Other categories
Impacts and allocated amounts
Project Administration/
Municipal company
Project
start
Adaption/
Mitigation/
Environment
Sector Results Allocated
(MSEK)
Ultrafilter
Department of Sustainable Waste and Water
2013 A Water management
Investment guarantees drinking water of the highest quality 39 400 sick days prevented on average per year.* Prevented sick days also entails lower social costs. 100 % of water passing through can be processed.*
570
Denitrification
Gryaab 2014 E Environment Expansion of a water treatment plant in order to reach a denitrification rate of 80% (from 60-65%).*
157
Tree planting
Parks and Landscape Administration
2014 M (A/E) Environment Trees are planted annually. 1710 trees have been planted since project start. The project improves biodiversity, promotes ecologically functional networks of
habitats, promotes a green cityscape and has positive effects on urban air quality and the temperature of nearby buildings.
14
The Pedestrian City
Road Traffic Administration
2015 M Sustainable transportation
Improved conditions for pedestrians traveling in urban areas. Examples include: improved traffic security and accessibility for pedestrians traveling
in the city.
50,3
The Bicycle City
Road Traffic Administration
2015 M Sustainable transportation
Project includes several improvements to the city’s bicycle infrastructure. Examples include: biking roads and 300 bike racks.
60,4
Total allocated 851,7
*Projected
City of Gothenburg Green Bond Impact Report 2016 9
Annex The values for avoided/reduced GHG emissions are based on comparisons between the projects and likely baseline scenarios. The
following conversions and calculations have been employed in order to increase comparability and provide a more detailed
understanding of the climate and environmental impacts that have resulted or can be expected to result from the Green Bond
eligible projects. Unless otherwise stated, calculations regarding GHG emissions from electricity use are based on the Nordic
residual electricity mix. GHG emission levels for the Nordic residual electricity mix in 2014 were 344,47g CO2eq/kWh (Swedish
Energy Markets Inspectorate). CO2 emissions generated from green electricity (Bra miljöval) are usually reported within 0-10 g/kWh,
for these calculations the value 5 g/kWh has been used. For comparative reasons the European attribute electricity mix has been
included, the value for 2014 was 572,89g/kWh (RE-DISS). Numbers presented may not add up due to rounding.
Information in italic is only intended to illustrate the relative size of the results by presenting alternative project scenarios where
other electricity mixes are used.
Electric cars Baseline Project Green electricity European attribute mix
GHG emissions (g CO2eq/km) 143 69 1 115
GHG emissions (g CO2eq/kWh) - 345 5 573
kWh/km - 0,2 0,2 0,2
km/year 10 000 10 000 10 000 10 000
Amount of cars 200 200 200 200
Total GHG emissions (tons CO2eq/year) 285 138 2 230
GHG emissions reduced/avoided (tons CO2eq/year) 148 283 56
The baseline value is based on EU requirements on new cars sold in the EU in 2015 (130g CO2eq/km). The value is adjusted with
GHG emissions from production, distribution and bio components. The distribution of diesel and gasoline cars is based on statistics
for the Swedish car fleet in 2014. Statistics are provided by the Swedish Transport Administration. Both project and baseline
numbers can be considered “well-to-wheels”. Avoided/reduced GHG emissions from the electric bikes and smaller vehicles are not
included which means the positive effects are even greater than stated in this report. (The table also includes green electricity and
the European attribute mix for comparisons).
GoBiGas Project
Energy delivered for transports (GWh) 26,5
Reduction in GHG emissions from transports (%) 74
GHG emissions from fossil fuel in the transport sector (g CO2eq/MJ) 83,6
Avoided GHG emissions at 100% reduction (Optimal efficiency) 7975
Avoided GHG emissions at 74 % reduction (Current efficiency) 5902
Reduced/avoided GHG emissions are calculated with the biogas calculation tool HBK.
Sustainable housing Baseline Project Nordic residual mix European attrbiute mix
Area constructed (m²) 13 800 13 800 13 800 13 800
Heating use (kWh/year) 977 300 686 100 686 100 686 100
Heating GHG emissions (g CO2eq/kWh) 53 53 53 53
GHG emissions from heating (tons CO2eq) 52 36 36 36
Electricity use (kWh/year) 265 300 146 400 146 400 146 400
Electricity GHG emissions (g CO2eq/kWh) 345 5 345 573
GHG emissions from electricity (tons CO2eq) 91 0,73 50 83
Annual energy savings (MWh) 410 410 410
Total GHG emissions avoided(tons CO2eq/year) 106 56 23
The baseline is based on the law requirements that were in effect the year construction started (BBR21). Calculations are based on
energy use for each individual building. Energy use is approximately 33% lower than baseline. The buildings use electricity certified
by the eco label Bra Miljöval (Wind and hydro): 5g CO2eq/kWh. Nordic residual electricity mix has been used for baseline values.
GHG emission levels used for district heating in 2015 were 53g CO2eq/kWh (Göteborg Energi AB). Energy use may decrease even
further over time since energy use is higher during the first year in a newly constructed building. (The table also includes the Nordic
residual mix and European attribute mix for comparisons).
Traffic lights energy efficiency Project Green electricity European attribute mix
GHG emissions (g CO2eq/kWh) 345 5 572,89
Energy use (MWh) 2416 2416 2416
GHG emissions (tons/year) 832 12 1384
Annual energy savings (MWh) 1232 1232 1232
GHG emissions reduced/avoided (tons CO2eq/year) 424 6 678
System effect decreased by approximately 308 000 W (51%). Nordic residual electricity mix has been used for project calculations.
(The table also includes green electricity and the European attribute mix for comparisons).
Ultrafilter Baseline (No ultrafilter) Project
Sick days (project lifetime) 2 001 000 108 000
Project life (years) 48 48
Sick days/year 41 690 2251
Sick days avoided/year 39 400
The goal of the investment is to provide drinking water of the highest quality. The project effects are based on a baseline scenario
proposed in a third party report (Samhällsekonomisk analys av installation av ultrafilter vid Lackarebäcks och Alelyckans vattenverk,
WSP) where no ultrafilters are installed and a likely type of waterborne disease outbreak occurs in 2038. The scenario is based on
the period 2009-2057 and includes numbers for both sporadic and outbreak related sick days.
Other indicators are provided directly by project operations.
City of Gothenburg Green Bond Impact Report 2016 10
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