Bonava, a leading Swedish residential developer of sustainable and affordable housing in Northern Europe, has issued its inaugural SEK 1bn green bond. Proceeds from the first bond will be used to develop housing in Sweden and Denmark certified according to the Nordic Swan Ecolabel.
The Swedish residential developer of sustainable and affordable housing Bonava has issued its inaugural green senior unsecured bond. Danske Bank is proud to have acted joint bookrunner and green structuring advisor in the transaction on the back of Bonava’s green finance framework, which Danske Bank helped Bonava develop in the beginning of 2020.
“We are delighted to have acted as joint bookrunner and green structuring advisor in Bonava’s inaugural green bond. The transaction appealed to several large institutions that believe in Bonava as a strong credit. Moreover, the transaction gained additional interest, as Bonava succeeded in demonstrating their strong commitment to sustainability towards investors,” says Tobias Lundgren, DCM Originator in Danske Bank and responsible for the transaction.
Green bond will finance the development of sustainable housing
Proceeds from Bonava’s first green bond will be used to finance the development of housing in Sweden and Denmark certified according to the Nordic Swan Ecolabel – a lifecycle analysis-based methodology, which considers the environment throughout the construction process, from raw materials to use of the completed buildings.
The certification includes strict requirements on energy efficiency, resource and waste management and sustainable sourcing and content of construction materials, and promotes green aspects such as charging stations for electric vehicles, green roofs and energy storage in the buildings.
“More than half of a building’s lifecycle emissions are generated during the construction phase and through the extraction, manufacturing and transport of building materials, while the remaining share comes from the energy use of the building. Sustainable housing development that combines a high energy performance and measures to reduce the emissions embedded in building materials is therefore urgent in order to reach the 1.5 °C goal. These aspects form the basis of Bonava’s green platform, and it has been a pleasure working together to establish the green financing framework,” says Moa Duvhammar, Analyst in Debt Capital Markets in Danske Bank.
The first residential developer to adopt emission reduction targets
Bonava was the first residential developer in Northern Europe to adopt emissions reductions targets validated by the Science-Based Targets initiative*. Bonava’s climate targets for 2030 are aligned with the Intergovernmental Panel on Climate Change (IPCC)’s recommendation to limit global warming to 1.5 °C.
Bonava is committed to, by 2030, reduce its absolute direct carbon emissions by 50%, and to reduce the lifetime carbon impact per Bonava home by 50%.
Achieving the targets will require Bonava to maximize resource efficiency and move towards a circular production model. This will include developing new, innovative working practices and material choices, working towards more sustainable use of land, and a transition to renewable energy and fuel across the value chain.
The ambitious climate targets form the basis of Bonava’s Green Finance Framework, which was developed together with Danske Bank and verified by Sustainalytics in the beginning of 2020.
SEK 1bn unsecured green bond maturing in March 2024, priced at 3m Stibor +350bps and issued on Friday 4th of September.
* The Science Based Targets initiative is a joint venture between the Carbon Disclosure Project (CDP), the UN Global Compact (UNGC), the World Resources Institute (WRI) and the World Wide Fund For Nature (WWF). Science Based Targets is a scientific methodology that ensures a company's targets are in line with what science tells us is required to achieve the targets in the global climate agreement signed in Paris.