Page 19 - 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

            programme (of which the green bond framework is a part of) and the climate strategy. The projects funded
            by Gothenburg’s Green Bond Program are publicly reported; this includes an annual investor letter that is
            available on the city’s homepage.  Publishing project-level information also allows the public to access
            information on how the proceeds are invested.

            2.3     Results

            The green bond’s underlying projects contribute to Gothenburg’s sustainability agenda, as well as to the well-
            being of the city’s residents. Through the issuance of green bonds, Gothenburg has supported investments
            in a variety of sustainable city projects such as a large-scale production of biogas by gasification, zero emission
            electric cars for the city’s administrative offices and companies, energy efficient housing and water treatment
            using the largest ultrafilter ever built in Scandinavia.
            The issuance of green bonds allow small-scale environmental projects to get funded by including them as
            part  of  a larger pool  of  projects. It can also give  cities positive  visibility. For example, in the  case of
            Gothenburg, green bonds together with the  city’s  strategic climate programme were  the reasons why
            Gothenburg was voted “Swedish Climate City of the Year” by World Wildlife Fund (WWF) in 2015.
            In addition to the benefits created by the projects financed through green bonds, the green bonds also help
            to limit the city’s financial risks by diversifying the sources of funding. Instead of relying completely on tax
            money, cities  can tap into additional sources of finance, and  access low-cost  capital that is needed for
            infrastructure investments by issuing green bonds. Green bonds also allow cities to access new investors
            compared to mainstream bonds.

            3       Conclusions

            Many cities that have been actively participating in environmental initiatives and implementing sustainable
            projects,  are taking  the next  logical  step towards  sustainability by including their finances in their
            environmental agenda.

            Although Gothenburg issued its first green bond in September 2013, COP21 results further encouraged the
            city to create funding flows through the issuance of green bonds. One of the elements of the Paris Agreement
            urges the creation of financing flows that would support the “below 1.5 degrees’” scenario. This is expected
            to be reflected in the emerging interest in city green bonds.
            Green bond frameworks can be created within any city context as long as the relevant legal and regulatory
            setup  and  level of  creditworthiness  permit the  creation of  such schemes. Gothenburg’s  green  bond
            framework has already been taken as an example by cities in the EU, as well as in developing and emerging
            economies, to consider the option of issuing their own green bonds. Gothenburg’s green bond framework
            has been useful in terms of transferability particularly because of its transparent management practices. In
            addition, the city has actively engaged in sharing information and showed its willingness to help entities
            interested in similar setups. Mexico City’s green bond issuance showcases the framework’s high potential for
            transferability to other cities.
            As seen in the case of Gothenburg, the first city green bond issuance is usually one of many to come. As soon
            as a city has the adequate legislation and financial infrastructure in place to issue green bonds, it can continue
            with new issuances. The first issuance can be the result of years of efforts, but when the process is in place,
            this method of financing sustainable city development projects is noted to be highly scalable.

            9   UNFCCC, Gothenburg Green Bonds Sweden,
      (accessed on January 12, 2017).

            U4SSC series                                                                                  13
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