NIB Financing the Future Nordisk Seminar, Nuuk, 28. marts 2019 - - PowerPoint PPT Presentation

NIB – Financing the Future

Nordisk Seminar, Nuuk, 28. marts 2019

Søren Kjær Mortensen

A shar A shared ed jour journey to ney to finance finance your

• ur futur

future

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NIB's Mandate history

 NIB founded in 1975 and started operating in August 1976  Cross border investments  Nordic Interest  Baltic countries joined as member states 2005  Competitiveness and Environment  Productivity and Environment

NIB as a long-term financing partner

The Nordic-Baltic International Financial Institution

► Long-term view, sound banking principle ► Focus on productivity gains and environmental benefits ► Environmental due diligence ► Solid financial performance ► Annual lending of EUR 3-4 bn, loan portfolio of EUR 18.5 bn ► AAA/Aaa international rating since 1982 ► Recent years, stand-alone AAA/Aaa issuer credit rating ► Issues bonds on international capital markets ► Proven ESG competences

NIB long term financing

 Extends loans to projects with e.g. state, state-owned enterprises, municipals, larger corporates, Mid-Caps, PPP, financial institutions for on-lending or risk-sharing  Maximum finance 50% of the project investment and hence, complements other financing.  Loan amounts EUR 5 mill. – EUR 300 mill.  Maturity 5 – 30 years  Largest issuer of Green Bonds in the Nordic Baltic region  Anchor investor in other Green Bonds in NIB's member states

Mandate?

Mandate sets a purpose Purpose drives actions Actions achieve impact

Mandate process

1 2 3 4 5

NIB's quality stamp for green projects

NIB Arctic Facility

 Implemented end-2015 together with other strategy initiatives; non-member lending, Baltic, Mid- Cap, SME risk-sharing, and later investments in member state green bond issuances  Increased attention to and prioritization of Arctic Region projects  Climate effects in the Arctic area  Economic potential  Geopolitical implications  EUR 500 million facility – fully deployed during 2016-2018.  Areas: E.g. Energy (focus on renewable), infrastructure (roads, airports, ports, rail, telecom, hybrid ferries, city development etc.), mining (in an environmental sustainable way), SME on- lending/risk sharing

NIB's Arctic region definition

SME SME leasi leasing f ng facili acility ty

NIB and Norway’s SpareBank 1 Nord-Norge have launched a new NOK 1 billion (EUR 104 million) loan facility for SMEs and environmental projects in Northern Norway.

L O A N P R O J E C T

Thir hird SME leasing d SME leasing facility in Norw acility in Norway ay

NIB and Norway’s SG Finans launched a EUR 150 million loan facility for financing equipment leasing to SMEs in Norway.

L O A N P R O J E C T

Ca Capacity pacity expansions xpansions at t Boliden's Boliden's mining mining oper

• perations

tions in in Nor Norther thern Sw n Sweden eden

A EUR 110 million loan finances Boliden's investment programme at the Aitik copper mine and the Rönnskär smelter.

L O A N P R O J E C T

NIB and Kainuu Social and Health Care Authority have signed a 30-year loan agreement of EUR 76 million for the construction of a new central hospital of Kainuu region in eastern Finland.

New ho New hospit spital al

L O A N P R O J E C T

Water ter infr infrastr astructur ucture e in investments estments

NIB has signed a 15-year loan deal with the City

• f Luleå to finance water infrastructure

investments in one of Sweden’s fastest-growing economic areas.

L O A N P R O J E C T

SME in SME investment estments

NIB and Helgeland Sparebank have signed a loan programme of NOK 250 million (EUR 26.9 million) for

• nlending SMEs and environmental projects in the

county of Helgeland in northern Norway.

L O A N P R O J E C T

New New po power er line line for a

• r a

brighter brighter futur future

NIB and Statnett signed a 15- year NOK 1 billion loan to partly finance a new 420 KV power line from Ofoten in Nordland to Balsfjord in Troms.

L O A N P R O J E C T

Arctic Facility Agreed Loans

Customers/projects financed 2016-2018

EUR 76 million Construction of a hospital. EUR 110 million Investments at the Aitik copper mine and at the Rönnskär smelter in Sweden. EUR 150 million Loan programme for equipment leasing to SMEs in Norway. EUR 52.1 million Municipal investment in upgrading biofuel production, a sewage pipeline, and expanding a drinking water plant. EUR 150 million Loan programme for onlending to SMEs in Norway. EUR 27 million Onlending to SMEs and environmental projects in northern Norway. EUR 105.4 million Loan programme for onlending to SMEs and environmental projects. EUR 107 million Construction of a transmission line in northern Norway. EUR 53.6 million Loan programme for onlending to SMEs and environmental projects.

NIB in Greenland

Grønland Grønlandsba sbank nken en

A A loan of DKK DKK 25 mi million for r fi financing investme stments ts in energy y effi ficiency, including heating ting syste systems ms and distr strict t heating ting syste systems. ms.

Grønlands Selvstyre

Three loans s for hy r hydropower r projects ts in Nu Nuuk, Sisimiut and Ilulissat, totaling EUR 110.5 million.

Tele Greenland

A A loan of EUR UR 20 mi million fi finances ma marine rine fi fibre optic tic cable connecting ting Gr Greenland with th Ice Iceland and Can Canada

Kalaallit Airports International A/S – Nuuk Airport

Kalaallit Airports International A/S – Ilulissat Airport

Arctic Investment needs / opportunities from a bankers perspective

 Investments in the Arctic Region has not taken off as much as envisaged some years ago.  Substantial capital resources will have to be mobilized  Higher costs for investments and operation  Larger infrastructure projects have significant and long lasting effects on economy, environment and society  Resource prices are volatile; environmental and reputational risks

Arctic Investment needs / opportunities from a bankers perspective (II)

 Governments (including regional and local authorities) have to be engaged and long term committed.  Bankable projects to be developed – PREDICTABILITY!

– Clear political mandate – Well developed business case and financing/liquidity strategy will reduce implementation risks – Environmentally sound – Cooperation between stakeholders to ensure regional issues, transparent and level playing field as well as adequate safeguard practices – Competencies of management and board, plus access to qualified administrative, legal and technical advisors – Contractors experience with local permits and authority requirements

 Preparation – as well as analysis and processes - are crucial success factors

Arctic Facility 2.0?

 Kalaallit Airports International A/S?  Urban development in Sermersooq or other Greenland municipality?  Wind in Norway?  Hydropower in Norway?  More on-lending facilities in the Arctic Region?

NIB ENVIRONMENTAL BONDS

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NIB ENVIRONMENTAL BONDS (NEBs)

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NEB Framework

Not for distribution in the USA 35

NIB ENVIRONMENTAL BONDS Categories

NIB ENVIRONMENTAL BONDS Impact reporting / NEB Annual Report

Task Force on Climate Related Financial Disclosure, TCFD

 Climate change => increased risk to the global economy; need to accurately price climate risk  Climate footprint related financial reporting is still evolving  Voluntary, so far, but more professional investors requires the information  Hence, international rating agencies are implementing it into their ratings  Consistent information disclosure across countries for the benefit of all stakeholders within the financial system.  Resilience of an corporates preparedness and strategies, taking into consideration different climate related scenarios incl. 2 degree Celcius scenario  Governance / resilience of strategy / risk management / metrics and targets  Impact on revenues, costs, balance sheet, capital and financing (stranded assets)  FI's will need to implement this focus in our analysis and report on our borrowers.

Thematic bonds

www.nib.int Søren Kjær Mortensen soren.mortensen@nib.int +35 +358 8 50 50 311 311 1 104 042