Page 115 - ITU-T Focus Group Digital Financial Services – Executive Summary

For example, the city has specified that the eligible energy efficiency projects should produce at least 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 60kWh/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 90kWh/sqm year). Being home to Scandinavia’s largest port, the city of 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-
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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
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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 the City 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 the Swedish and EU legislation. These projects should
promote transition to low-carbon and climate resilient growth, and are in line with the City of Gothenburg’s
environmental program 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 its first issuance of green bonds in 2013, the City of 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 1,000 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 the City of Gothenburg and Mexico City alike, the change has not happened at once, but has instead
required continuous efforts to promote the cities’ sustainability agenda. One of the main drivers for issuing
city green bonds has been the gradual transition in public policy and legislation towards sustainability over
the last years. In many cases the development has been led by international commitments, national
government policies and strategies, and later adopted by local city governments. For example, Mexico
becoming the first developing country to adopt a General Climate Change Law (LGCC) in 2012, highlighted
the country’s strong commitment to reducing its emissions. The National Climate Change Strategy was
adopted in 2013, and from there on the country has been on the path to transition towards more sustainable
city policies.

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13 Explained in more detail in the City of Gothenburg’s annual report 2015 and strategy document “Development
Strategy Göteborg 2035”.
14 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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