Page 17 - Connecting cities and communities with the Sustainable Development Goals
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United for Smart Sustainable Cities
                              Connecting cities and communities with the Sustainable Development Goals

            2       The project(s)

            2.1     Vision and content
            Issuing green bonds allows cities to support the implementation of sustainable development projects with
            the help of additional capital from the green bond market. The eligible projects under Gothenburg’s green
            bond framework closely follow the focus areas of the city’s strategy.
            For example, the city has specified that the eligible energy efficiency projects should produce at least a 25%
            reduction in energy usage. Related to the city’s development boom, an estimated 80 000 new homes and
            workplaces will be built by 2035. This is reflected in the eligible green bond projects under “sustainable
            housing”, which comprises the infrastructure and construction of new green buildings with specific energy
            efficiency  requirements  (e.g.  new  apartment  constructions  up  to  60  kWh/sqm  year),  as  well  as  major
            renovations to make buildings more energy efficient (e.g. apartment renovation reduction of at least 40% or
            up to 90 kWh/sqm year). Being home to Scandinavia’s largest port, Gothenburg gives emphasis to sustainable
            transport by including in its eligible projects, a list of elements on sustainable shipping and sustainable freight
            to decrease the use of fossil fuels. In addition, sustainable transport can include projects on biking and
            pedestrian infrastructure, or public transportation. All of this is aligned with the city’s long-term vision and
            development strategy .
            In general, Mexico City has strong local climate action plans, and has participated actively in international
            forums to report on its commitments and actions. The city’s local climate change vision and commitments
            consist of two main elements, Climate Action Local Strategy 2014-2020 (ELAC) and Climate Action Program
            2014-2020  (PACCM),  which  together  define  the  broad  guidelines  for  the  city’s  climate  strategy  and
            corresponding action plans. Mexico City’s recent Resilience Strategy , published as part of the 100 Resilient
            Cities Initiative by the Rockefeller Foundation, addresses the challenges faced by the city through a five-pillar
            structure including aspects of planning for urban and regional resilience, promoting water resilience as a new
            paradigm to manage water in the Mexico basin, and improving mobility through an integrated, safe and
            sustainable system.
            Under a green bond framework, the proceeds from bond issuances are earmarked for eligible green projects
            only. In the case of Gothenburg, green bonds are issued to finance environmental projects on renewable
            energy, city planning, public transport, waste management, smart grids and water treatment. In general, the
            projects  chosen  have  to  comply  with  Swedish  and  EU  legislation.  These  projects  should  promote  the
            transition  to  low-carbon  and  climate-resilient  growth,  and  are  in  line  with  Gothenburg’s  environmental
            programme and climate strategy. Usually, when a city issues a green bond, the net proceeds of the issuance
            are transferred to a specific budget account that supports the city’s lending to the eligible projects.

            Since the first issuance of green bonds in 2013, Gothenburg has raised a total of 4.36 billion SEK (458 million
            EUR) through the green bond market. The first green bond issued by Mexico City in December 2016, had a
            value of 1000 million MXN (46 million EUR). As per the Mexico City green bond framework’s eligibility criteria,
            the proceeds of the bond will be used to support projects in sustainable transport, sustainable buildings,
            renewable energy, energy efficiency, water efficiency and wastewater management, pollution prevention
            and control, conservation of biodiversity and climate change adaptation.

            2.2     Implementation

            The decisions made by local governments play a significant role in the issuance of green bonds. In the case
            of  Gothenburg  and  Mexico  City  alike,  the  change  has  not  happened  at  once,  but  has  instead  required

            3    Explained in more detail  in the city of  Gothenburg’s annual report 2015 and strategy document “Development
               Strategy Göteborg 2035”.
            4   Mexico  City,  CDMX  Resilience  Strategy  –  Adaptive,  inclusive  and  equitable  transformation,  2016,
               %20English.pdf (accessed on January 18, 2017).

            U4SSC series                                                                                   11
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