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Green finance

Green financing is traditional financing where proceeds are allocated to finance and refinance assets and projects with a positive climate and environmental impact.

Financing with a focus on sustainability and positive climate impact

Landsvirkjun has established a Green Finance Framework in line with the company’s focus on sustainability and climate action.

Why green financing?

Proceeds from Green Finance instruments issued under the framework are used for projects that promote the sustainable, responsible and efficient use of Icelandic natural resources to produce renewable energy.

Green financing provides investors the opportunity to direct their funds to green initiatives, i.e. to support projects that have a positive environmental and climate impact. Landsvirkjun became the first Icelandic issuer of Green Bonds in March 2018 when the company issued a USD 200 million US private placement ("USPP") in Green Bond format. Landsvirkjun announced its second Green Bond issuance in September 2020 when the company issued USD 150 million in the USPP market in Green Bond format.

Landsvirkjun’s Green Finance Framework

The Green Finance Framework aligns with the four core components of the Green Bond Principles issued in 2021 by the International Capital Market Association (ICMA) and the Green Loan Principles issued in 2023 by the Loan Market Association (LMA):

  1. Use of Proceeds
  2. Process for Project Evaluation and Selection
  3. Management of Proceeds
  4. Reporting

The company obtained a second party opinion on its Green Finance Framework from Sustainalytics. The second party opinion states that Sustainalytics is confident that Landsvirkjun is well-positioned to issue green finance instruments and that the Green Finance Framework is robust, transparent and in alignment with the four components of the ICMA Green Bond Principles 2021 and LMA Green Loan Principles 2023.

Green finance framework

Reporting

Landsvirkjun emphasises fair and transparent disclosure.

The Company’s Climate Account is based on the methodology of the Greenhouse Gas Protocol (GHGP) and has been inspected and verified by Bureau Veritas, one of the world’s leading certification bodies, using the international standard ISO-14064-3, with limited assurance. This will ensure that Landsvirkjun’s findings are consistent with emissions from its operations.

More information and contact
Treasury Department
treasury@landsvirkjun.is

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