Fact Sheet

A provider of vital services to the Norwegian public, in areas such as healthcare, education, transport and infrastructure.

« Acting largely as a state instrument, KBN performs an important public policy function in providing low-cost funding to the Norwegian LRG sector and in promoting competition in the municipal loan market.» (Standard & Poor’s – June 2022).

The close relationship between the central government and the municipal sector is characterized by strict central regulation and oversight.  The Norwegian government also showed this support throughout the Covid-19 outbreak, whereby it compensated municipalities and counties for extra costs and revenue shortfalls linked to pandemic. This enabled local governments to maintain their activities and economic stability. Norwegian local governments are prohibited by law from filing for bankruptcy (Local Government Act §55).

The Kingdom of Norway (AAA/Aaa) is a strong, open, diversified economy with solid fundamentals and a highly developed industrial base. Norway has one of the world’s highest GDP per capita and topped the 2018 UN Human Development Index. The government has managed a solid current account surplus for the past decades and estimates continued large surpluses going forward.

As evidenced in the Key Economic Indicator table (opposite), the Covid-19 outbreak had a visible impact on the Norwegian economy. The economy bounced back through 2021 with significant support from the Norwegian government and returned to pre-pandemic levels in terms of GDP growth and uUnemployment rate. 2022 saw continued pressure on supply chains and with the war in Ukraine, Norway, similar to many other advanced economies, experienced high inflation and elevated energy prices. Despite rising policy rates, inflation continues to remain well above Norges Bank’s target.

Activity in the Norwegian economy remains high though and unemployment continues to remain at relatively low levels. With the sharp rise in policy rates globally, global growth is expected to weaken throughout 2023. Norway is also expected to experience this slowdown with both growth and inflation expected to drop to 1.2% and 4.9% respectively by the end of 2023.

As a large exporter of energy, Norway’s current account surplus remains very solid and is forecast to be 18.4% in 2023 vs. 27.8% in 2022.

Currently, Norway’s SWF, the Government Pension Fund – Global, stands at approximately USD 1.3 trillion (over 300% of Norwegian GDP and 800% of the national budget). The fund has seen record inflow over the last two years due to elevated energy prices. For more information on the SWF, visit www.nbim.no

• www.nbim.no

Source: SSB / Norges Bank

Through our Green Bond program, we aim to finance the Norwegian local government sector’s transition to a climate-resilient, low carbon society. KBN aims to be a leading financial institution in the areas of climate risk, sustainability and green finance solutions.

KBN began lending to green investments in the Local government sector in 2010. In 2013, KBN was one of the first European issuers to launch a public USD green bond earmarked towards green projects. KBN updated its Green Bond Framework in 2021 and was awarded a Medium Green shading and Excellent governance score by CICERO. The 2021 Framework includes important updates to KBN’s governance structure for green finance. In 2017, KBN was elected executive committee member of Green Bond Principles (GBP), the leading international green bonds standard.

As of January 2023, KBN’s Green Loans outstanding were almost NOK 40 billion. In line with KBN’s growing Green Loans, Green Bond issuance has continued to grow. KBN has issued Green Bonds in USD, NOK, AUD, CAD and SEK. For more information regarding KBN Green Bonds and KBN’s Impact Reporting, please see the Green Bonds section on our website.