Page 17 - Connecting cities and communities with the Sustainable Development Goals

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
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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
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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,
http://lghttp.60358.nexcesscdn.net/8046264/images/page/-/100rc/pdfs/CDMX%20Resilience%20Strategy%20-
%20English.pdf (accessed on January 18, 2017).

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