In 2013, Gothenburg became the first city in the world to issue green bonds – a financial tool designed to counter and reduce the impact of climate change.
In three years, Gothenburg has issued green bonds worth almost $400 million for a selected pool of projects that promote the transition to low-carbon and climate-resilient urban development. Green bonds are a win-win situation for the city and investors as they offer a return on investment, just like traditional bonds, but also contribute to tackling climate change.
The green bonds ensure that the municipality only builds new facilities that are in line with the passive house standards – using about 60% less energy than required under national building regulations. One of the projects financed by green bonds is the GoBiGas large-scale biogas plant. The facility creates biogas from the waste generated by the forestry industry, agriculture and municipal services to deliver 800-1,000 GWh worth of energy to city residents. Other projects financed by green bonds include district heating, water treatment, electric vehicles, and nitrogen retention.
36,000 tons of CO2 are reduced per year by the green bonds-financed biogas plant.
The challenge
One of the key objectives of introducing green bonds was to overcome the challenge of limited communication between the environment and finance departments in the city. Given the large investments, it has been necessary to establish strong collaboration and partnership between these two departments. The cooperation is paying off, as the city has greatly improved its ability to realize green projects.
Co-benefits
Economic The green bonds-financed Lackarebäck water treatment and purification plant will result in fewer disease outbreaks, which will prevent up to 290,000 days of lost productivity from 2014 to 2038.
Environmental When the GoBiGas biogas plant is fully operational, the energy generated each year will be the equivalent to the fuel it takes to power up to 100,000 cars.
Health With cleaner water provided by the Lackarebäck water treatment and purification plant, Gothenburg’s citizens will avoid 1.4 million days spent in the hospital.
About Gothenburg
Gothenburg is the second-largest city in Sweden and the fifth-largest in the Nordic countries. The Port of Gothenburg is now the largest port in the Nordic countries. The city hosts some of the largest annual events in Scandinavia. The Gothenburg Film Festival, held in January since 1979, is the leading Scandinavian film festival with over 155,000 visitors each year. In summer, a wide variety of music festivals are held.
