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Impact Report 2022

Our Impact report present the environmental impact of KBN's green loan program. All funds raised by KBN's green bond issuances will be used exclusively to finance green loans in the Norwegian municipal sector.

Photo: Grieghallen


Strong green growth and further strengthening of impact reporting methods

KBN’s 2022 Impact Report confirms strong growth in green lending and successful green bond issuances, and provides detailed information on developments in impact reporting, including taxonomy alignment of criteria for green projects.

Continued growth in green lending

2022 was yet a record-breaking year for KBN’s green loans. The green lending portfolio grew by NOK 8,4 billion, equivalent to a 24% growth from 2021. By end of 2022, 134 municipalities, five regions and 70 other customers had been approved for green loans to a total of 408 projects in seven different project categories. The Impact Report presents these projects and their associated environmental impact, while providing information on the governance of KBN’s green lending programme.

Mapping against the EU Taxonomy expanded and improved

KBN has for several years performed an analysis of how eligibility criteria for green loans align with the EU Taxonomy. Until now the exercise has been limited to the Substantial Contribution criteria (SC), but the scope has now been expanded to also covering the Do No Significant Harm (DNSH) criteria.

Although we find many of our criteria to be aligned or likely aligned with the Substantial Contribution criteria, there is no alignment with SC and DNSH criteria. Extensive risk, water, and biodiversity assessments referred to in most DNSH criteria are not typically undertaken for small-scale projects in the Norwegian local government sector. The fact that none of KBN’s project types are found to be in full alignment with SC and DNSH criteria demonstrates the complexity of the taxonomy and its documentation requirements. It furthermore confirms that the market for taxonomy-compliant projects is still immature, even in the Nordics where sustainable investments are high on the agenda.

In January 2023 a long-awaited definition of NZEB (nearly zero-emission buildings) in the Norwegian context was published by Norwegian authorities. This enables KBN to evaluate new low-energy buildings (smaller than 5000m2) against the relevant taxonomy criterion, bringing the share of alignment with substantial contribution to 18%.

A summary of the analysis can be found in the report, while the full mapping is available for download in spreadsheet format.

Several improvements to impact reporting methods

KBN aspires to continuously improve its impact reporting. An example is the revised calculation method for electric shore power, as described on page 21 of the report. Furthermore, from 2022 KBN applies the grid factor calculated by the Norwegian Water Resources and Energy Directorate (NVE) of 11g CO2e/kWh, replacing the previously used grid factor of 315g CO2e/kWh, corresponding to the European mainland mix recommended in Position Paper on Green Bonds Impact Reporting» (2020). The change in grid factor results in lower calculated avoided and reduced GHG emissions from the green portfolio compared to previous years. The revision will lower the positive impact of energy efficiency projects in buildings and renewable energy production, whilst reducing the negative impact of an increased use of electricity, such as for zero emission transportation. KBN, however believes this is a more accurate estimate of the environmental impact associated with green projects.

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