Children and youth of Kokkola innovate environmental actions in a competition sponsored by the Green Pioneer of the Year prize money

The City of Kokkola won our Green Pioneer of the Year competition last year. The prize money was used to organize a competition in which local children and youth could propose ideas for sustainable development initiatives.

Last fall, MuniFin awarded Kokkola the Green Pioneer of the Year title. The competition prize was EUR 10,000, which the winner could use for a sustainability project of their choice.

With the prize money, Kokkola organized a competition where preschool and school children could innovate projects related to climate and the environment.

“Environmental issues are crucial for the happiness of the younger generation. That’s why we in Kokkola believe in our children and young people and wanted to involve them in brainstorming for a green future,” explained Veli-Matti Isoaho, Head of Construction for the City of Kokkola, on the decision to organize the competition.

A total of 44 teams participated in the competition in four different age categories. Each team could submit one project for the competition. Ideas were collected during February and March 2024.

Ambitious and creative projects impressed the jury

The winners of the competition were announced at an award ceremony in early May organized by the City of Kokkola. The following groups were selected for their innovative ideas:

Early Childhood Education

Winner: Ulkometsä Daycare

Project: Integrating Recycling into Daily Daycare Activities

Preschool – 2nd Grade

Winner: Lohtaja Kirkonkylä School, 2nd Grade

Project: Nature-Friendly Schoolyard

3rd – 6th Grade

Winner: Kälviä Marttila School, 6th Grade

Project: Marttila School’s Backyard Garden

Junior High

Winner: Hakalahti School, 9A

Project: Biodiversity Protection Campaign

Each category winner will receive an EUR 2,500 cash prize, which the class or group can use as they wish.

Green Pioneer of the Year Won with the Piispanmäki Project

Last year, Kokkola won the competition with the Piispanmäki multi-functional building project. The city’s commitment to green financing requirements impressed the competition’s evaluation panel.

“Kokkola has admirably taken ownership of sustainable construction, which was evident in the Piispanmäki project. The initiative was managed internally, with the entire organization committed to it. It was a pleasure to see how Kokkola’s children and young people were involved in environmental discussions,” said Daniel Eriksson, MuniFin’s Customer Relationship Manager.

MuniFin first named a Green Pioneer of the Year among its clients in 2019, recognizing those who have ambitiously advanced climate and environmental goals.

Read more:

The city of Kokkola is the Green Pioneer of the year 2023

Welfare society needs social glue that fosters a sense of community

In 2023, the number of our social finance projects increased by over 40% from the year before. A growing awareness of sustainability matters coupled with increasing stakeholder expectations are pushing up the demand for our sustainable finance.

Our raison d’être and the main duty of our customers is to build up the Finnish welfare state. Our customers are tasked with organising the basic functions of society, such as health and social services, daycare, basic education, care for the elderly, infrastructure, affordable housing and various cultural and sports services. The values of the Nordic welfare state are inherent in the work of our social finance customers, whose investments often also benefit the environment and climate.

We published our first sustainability agenda in October, sharing our goal of increasing the proportion of our social finance to 8% of our long-term customer financing by 2030. More and more, our customers are bringing up themes related to our social and green finance in our interactions, signalling a growing awareness of sustainability. Our customers’ own stakeholders are also interested in these themes, so the push to improve sustainability is coming from many fronts. As a result, a growing number of projects are now meeting the criteria for our sustainable finance.

In 2023, the number of projects accepted into our social finance portfolio increased by over 40% from the year before. We approved 34 projects, the majority of which are welfare projects or housing solutions aimed at the most vulnerable population. It is safe to say that we are well on the way towards our goal.

The responsibility for organising healthcare, social welfare and rescue services was transferred from municipalities to wellbeing services counties on 1 January 2023, but municipalities nevertheless continue to play a vital role in promoting good health and wellbeing. Many of our social finance projects are important not only to their users, but also to the vitality of the municipality. Investments that generate activity are a signal to companies that the municipality will stay vital.

For residents, social finance projects signify better services: communal living solutions, healthcare services, modern and healthy learning environments and more opportunities for hobbies, cultural activities and sports. In addition to creating the setting for municipal operations, the project buildings often double as venues for sports, culture and other activities offered by the voluntary sector. The projects cater for people of different ages, backgrounds and cultures, but most of all, they bring people together. This is the social glue that we need to keep the welfare society together in a time of heightened individualism and polarisation.

Rami Erkkilä, Senior Specialist, sustainable finance
Rami Erkkilä is responsible for green and social finance products at MuniFin.

The article was originally published on the 7th of March as a part of MuniFin Social impact report 2023.

MuniFin Social impact report 2023

Finnish affordable social housing organisations forerunners in sustainable construction – majority of loans are green or social finance

The Finnish affordable social housing sector plays a significant role in the development of a sustainable welfare state. In 2023, a vast majority of MuniFin’s housing loans were granted to either green or social finance projects.

An increasing amount of housing in Finland is being constructed and financed with consideration for social and environmental factors. Our customers, including affordable social housing organizations and municipal rental housing projects, play a significant role in this trend. Last year, the share of green and social finance in our housing loans reached a record high of 63 percent.

“An increasing number of our customers have made it their mission to carry out their projects more sustainably, taking into account environmental, climate or social benefits. Affordable social housing production is at the absolute forefront of sustainable construction in Finland”, says Päivi Petäjäniemi, Customer Relations Manager at MuniFin.

MuniFin was the first in Finland to start offering green finance for climate and environmentally friendly projects in 2016. In 2020, we also became the first to launch social finance, which emphasizes the social benefits of the projects: equality, communality, safety, welfare, or regional vitality.

“Our customers were among the first to learn about green and social finance, and we have persistently kept the topic on the agenda ever since. Nowadays, they have comprehensive knowledge of their alternatives, and they proactively seek green and social finance to give visibility to their projects. All their projects are significant for the Finnish welfare society, but the ones that fall under the green and social finance framework, are truly best in class”, Petäjäniemi explains.

Buildings and construction account for about a third of Finland’s greenhouse gas emissions*. The figures show that Finnish municipalities and non-profit housing operators are strongly involved in climate efforts.

The energy efficiency of affordable social housing buildings is generally higher than buildings in the private sector*. One factor is the forthcoming Corporate Sustainability Reporting Directive (CSDR), which is already directing the larger operators towards more sustainable choices. Also, the residents of newly constructed homes are increasingly demanding more energy-efficient housing solutions.

“More and more buildings are built in energy class A, which is the minimum demand in our green finance framework. Our customers are bold and want to try new things, so I expect to see a rising number of projects that also consider the impacts of the entire life cycle and construction chain. The challenge for now is that costs may seem higher in the construction phase. Saved energy costs for example, show in the long run, and our customers have strict demands for affordability from The Housing Finance and Development Centre of Finland (Ara), which oversees the projects.”

The prerequisites for the approval of social finance projects consider the social benefits of the projects.

“Our customers are increasingly planning housing as a whole, and this is clearly visible in projects for special groups. For example, they want to provide every student with their own apartment, but there is increasing investment in shared spaces, which promotes community and prevents loneliness. Residents are also offered various services, such as car-sharing or resident counselling”, Petäjäniemi says.

Finnish affordable social housing supports social mixing and brings down homelessness

In Finland, affordable social housing is mainly provided by municipality-owned companies and nationwide non-profit organisations. The production is financed through interest subsidy loans. The loans are guaranteed by the Finnish state through The Housing Finance and Development Centre of Finland (Ara), which is administered by the Ministry of the Environment. Alternatively, housing projects can also be loans to municipality owned companies. These loans do not have a state interest subsidy, but they come with a 100% municipal guarantee.

MuniFin is the main financier of affordable social housing production in Finland. The loan periods are long, up to 41 years.

The Finnish government updated its housing policy development programme in 2021. Some of the main objectives of this programme include increasing housing construction in growing urban areas and eradicating homelessness within two government terms. Affordable social housing has played a remarkable role in tackling homelessness in Finland, especially family homelessness. Affordable social housing is also instrumental in preventing segregation and facilitating labour mobility.

Read more:

Finnish system for affordable social housing supports social mixing and brings down homelessness

Our sustainability agenda sets the direction until 2035

As outlined in our strategy, key aspects of sustainability at MuniFin include acting as our customers’ partner in building a sustainable society while efficiently managing climate-related and environmental risks.

Our long-term impact stems from the products and services we offer our customers. In our sustainability agenda published in 2023, we set the direction and goals for our sustainability efforts until 2035.

In this agenda, we commit to increasing the proportion of sustainable finance in our lending portfolio into one third by 2030. In 2023, the share was 21,3 percent. We also set emission reduction targets for financed buildings. Our target level is 8 kgCO₂/m² by 2035, representing reduction compared to the 2022 level.

MuniFin's Sustainability Agenda

*The Confederation of Finnish Construction Industries RT (CFCI):

*Finnish Affordable Housing Companies’ Federation:

More information

Karoliina Kajova

Senior Manager, Funding

 +358 50 5767 707 

MuniFin’s role as a trusted financing partner has grown even more important – 2023 annual report and sustainable finance impact reports published

We have published our annual report for 2023. We have also published the impact reports on our green and social finance and the Pillar III disclosure report on capital adequacy.

The year 2023 was the fourth consecutive year marked by instability. In these uncertain times, our role as our customers’ trusted financing partner has grown even more important. At MuniFin, 2023 was a year when we put sustainability even more front and centre as we revised our strategy and published our first sustainability agenda.

The volatile operating environment did not significantly affect our performance. Our operations remained stable, and we were again able to successfully carry out our core mandate of providing affordable long-term financing for our customers.

Our long-term customer finance increased by about 10% from the previous year. Our new long-term customer financing remained on a par with 2022, totalling EUR 4.4 billion. Our profitability was slightly higher than in 2022.

The amount of our sustainable finance, i.e. our green and social finance, grew by about EUR 2 billion in 2023. Our sustainable finance products are our way of encouraging our customers to make more responsible investments. Read more about the impacts of our sustainable finance in the green and social impact reports published today.

What was the year 2023 like at MuniFin?

MuniFin Annual Report 2023

MuniFin Green Impact Report 2023

MuniFin Social Impact Report 2023

MuniFin Pillar III Disclosure Report 2023

MuniFin awarded as the Best SSA ESG Bond Issuer

The award is given to an SSA, Sovereigns, Supranational, and Agencies, borrower that is active in international and local SSA bond markets, offering a full range of products, in private and public format, in multiple currencies across the yield curve and to the broadest range of SSA ESG bond investors. CMD Portal is an independent collaborative market data network for bond and money market professionals. 

CMD Portal praised MuniFin for our long-term commitment to sustainability. In October, one highlight on our ESG path, was the publication of the new Sustainability Agenda with clear long-term objectives for our sustainability efforts. The agenda sets two main themes: supporting the Finnish welfare society and accelerating Finland’s green transition through our financing, for which we source funds with our sustainable bonds.  

“Our customers play a significant role in achieving Finland’s climate goals. Therefore, we aim for at least one-third of long-term customer financing to be green and social finance by 2030. The most notable change compared to our previous initiatives, is that we set reduction targets for financed buildings. Our goal is to achieve a reduction to 8 kgCO2 per m2 by 2035 and our green finance plays a vital role in achieving this target”, says Sustainability Analyst Mikko Noronen from MuniFin’s Funding and Sustainability team. 

On the sustainable bonds front, the year had two successful issuances. In February, MuniFin issued a record-sized EUR 1 billion green bond, which was the largest ever EUR denominated green bond by a Nordic SSA issuer. It was quickly nearly twice oversubscribed and 80% of the high-quality orderbook was allocated to ESG investors. Another highlight was the successful USD 100 million social bond in August, which was issued as a private placement. 

“The past year continued to be successful on the ESG front and we are extremely happy for this recognition. We aim to maintain our presence in the sustainable bonds market also next year when we are planning to issue EUR 9 –10 billion of new long-term funding. The sizes of our sustainable bonds will depend on the development of the customer financing portfolio”, says Senior Manager Karoliina Kajova from MuniFin’s Funding team. 

MuniFin also wins runner-up for the Best ESG Issuer Award. Our active presence and successful issuances have been acknowledged by CMD Portal also before. In April, MuniFin’s record-size green bond earned the TopDeal acknowledgement, and in January, MuniFin earned the award of the Best Structured Notes Issuer, which was the third year in a row for this recognition.  

MuniFin is Finland’s pioneer in sustainable finance 

In 2016, MuniFin was the first financial institution in Finland to offer green finance for climate and environmentally friendly projects and was the first Finnish issuer of green bonds.  

In 2020, MuniFin became the first financial institution in Finland to issue social bonds, which is offered to projects that promote equality, communality, safety, welfare, or regional vitality.  

These bonds are an integral part of our funding strategy. Both green and social bonds have their own frameworks. 

Read more about our green and social bonds

Read more 

MuniFin issues a record-breaking EUR 1 billion green bond 

MuniFin’s sustainability agenda aims to increase the amount of sustainable finance and reduce financed emissions 

Further information  

Antti Kontio – Head of Funding and Sustainability  

+358 50 3700 285  

Mikko Noronen – Sustainability Analyst, Funding and Sustainability 

+358 50 479 7533 

Karoliina Kajova – Senior Manager, Funding  

+358 50 5767 707  

Lari Toppinen – Senior Analyst, Funding 

+358 50 4079 300  

Aaro Koski – Analyst, Funding 

+358 45 138 7465 

The city of Kokkola is the Green Pioneer of the year 2023

MuniFin warmly congratulates the city of Kokkola and the Piispanmäki multipurpose building on winning the Green Pioneer of the Year competition.

Over the course of the autumn 2023, MuniFin has looked at five finalists in the company’s competition for the title of Green Pioneer. Each of them has worked ambitiously to advance climate and environmental goals. Of these five finalists, the city of Kokkola and the city’s Piispanmäki multipurpose building project have now been chosen as the green pioneer of 2023. The multipurpose building, which will serve schoolchildren, daycare children, and city employees, will be completed in Piispanmäki in 2025.

Watch the video to see why Kokkola was awarded and what the prize money will be used for.

Sustainability and change were boldly taken into their own hands in Kokkola

The selection and evaluation of the finalists was the done by the Green Finance Team at MuniFin. Sustainability finance experts saw exemplary characteristics in each of the five finalists and their flagship projects. However, what made Piispanmäki special was how strongly the project showed commitment of the city to the realization of sustainable investment.

In Piispanmäki, achieving environmental goals has been ensured by taking the implementation of the project into their own hands. This has required careful resource allocation, participation, and commitment throughout the organization, the Green Finance Team assesses. This success, in turn, requires an effort to dismantle silos and familiar ways and create new practices. The planning of the project reflects familiarity with the requirements of green financing, such as energy efficiency and renewable self-sufficiency energy. The building will act as a learning environment for sustainable development. These factors made a deep impression on MuniFin’s experts.

“What was impressive was the extent to which sustainable construction has been examined in Kokkola, but also the precise and detailed material that made it easy for the Green Finance Team to assess the project. I would use the power word “ownership”: the city has boldly taken the themes of change into their own hands and preferred to do things themselves rather than buy things from outside. This has resulted in excellent impacts in the Piispanmäki project”, praises Rami Erkkilä, Senior Expert on Sustainable Financing at MuniFin.

The city of Kokkola has followed its strategic goals impressively and the work has been supported by the whole organization. At the same time, valuable learnings are accumulated and can be applied in future projects.

“Kokkola joined the Hinku network in June 2022. The following year, MuniFin chose us as the green pioneer of the year. We are enormously proud of this recognition. This has been a tremendous success story and speaks of the potential of the city in implementing sustainable development projects. The passion and desire of all stakeholders to not only achieve but also exceed the set goals have made this an exceptional experience. Of course, it also challenges and obliges us to continue the same path”, comments Veli-Matti Isoaho, Building Manager of the city of Kokkola, on the victory.

The prize money is used to involve Kokkola’s children and young people in green thinking

The Green Pioneer competition prize is 10,000 euros, which the winner can use freely for a sustainable development project of their choice. In Kokkola, there is already a preliminary idea of the use of the funds.

“We plan to organize a competition for schoolchildren, where the children get to brainstorm competition entries related to nature topics, such as recycling or climate change mitigation. The most creative and idea-rich works of each age group will be rewarded. The environment is a central issue for the happiness of younger generations. That’s why in Kokkola we also believe in the input of children and young people and want them to join in brainstorming a green future”, describes Isoaho.

The Green Pioneer of the Year was awarded for the first time in 2019, when the city of Joensuu won the competition with its “comprehensive approach”.

MuniFin thanks all the finalists of 2023 for their exemplary work on climate and environmental issues and for making these goals a part of everyday life. The other four finalists in the Green Pioneer of the Year competition were the municipality of Siuntio, the municipality of Pirkkala, Y-Säätiö (a foundation providing affordable social housing) and Sivakka (an affordable social housing provider owned by the City of Oulu.

Criteria for Piispanmäki multipurpose building’s victory:

  • In Kokkola, there is an exceptional ownership in the implementation of sustainable development projects. Their own expertise is actively developed.
  • In Kokkola, they have succeeded in an exemplary way in breaking down organizational silos and creating new ways of working.
  • The project is being implemented in accordance with exceptionally comprehensive sustainability goals, which at the same time reflect the best practices of green finance listed in the MuniFin’s Green Bond Framework.
  • Excellent environmental performance is achieved through energy-efficient solutions, but also through materials and certified practices at different stages of construction.
  • The diverse consideration and utilization of the environment as part of teaching and user experience.
  • The significant size of the building and its impacts during construction and use.
  • The building’s position in its environment as a place that brings together different stakeholders, which in part reduces local emissions and reduces the need for errand travel.
  • Social and societal ripple effects, for example, to different hobby and activity groups. The building offers extensive facilities for third sector activities.

The green finance trio drives sustainable development in Finland and monitors international regulation

MuniFin’s internal assessment team for green financing recently celebrated its first anniversary. The three-member team was established in August-September 2022, when the company updated its green financing framework. The new framework has streamlined the granting of green financing: the external assessment team was abandoned, and the responsibility for evaluating projects was transferred internally to Rami Erkkilä, Mikko Noronen and Kalle Kinnunen.

“The internal assessment team can convene quickly if necessary. This means that projects can be evaluated as soon as customers need financing”, says Sustainability Manager Kinnunen.

The schedule is flexible, but the criteria are not. MuniFin’s new green financing framework is stricter and more transparent than ever.

“For example, green financing is no longer granted for projects that use fossil energy sources directly for heating”, clarifies Erkkilä, who is a senior expert in responsible financing in the team.

Evaluation, reporting, and impact calculation

Project evaluation and document review take up a large part of Erkkilä’s and Noronen’s working days. To be selected for the green financing portfolio, two members of the evaluation team must assess and approve the project. Kinnunen, who leads MuniFin’s sustainability work, substitutes for the duo if necessary.

“Throughout the week, we review each other’s decision proposals and discuss them in meetings on Fridays”, says the newest member of the MuniFin team, Noronen, who started as a Sustainability Analyst in May of last year.

“If a decision requires more detailed information, we can ask the customer for clarification. The external assessment team met less frequently, and then the decision was either a ‘yes’ or a ’no'”, Erkkilä recalls.

The trio also participates in customer meetings, maintains contact with banks and other stakeholders, and follows the regulation revolving around responsible financing. A significant part of their work is the annual impact reporting of green financing, i.e., calculating and publishing the environmental impacts of the projects.

At the intersection of domestic and international

One foot of the assessment team is in the domestic market, the other in the international markets.

“On the one hand, you have to look at where financing is granted and what the law in Finland says. On the other hand, you have to consider what international regulation and investors require. You have to be credible in both directions”, Kinnunen reflects.

Discrepancies may also arise when going into details, for example, talking about water flow rates.

“The EU taxonomy states that water should not flow in showers faster than eight liters per minute. Finnish building regulations have a minimum level of nine liters per minute. It’s pretty difficult to reconcile these two”, Erkkilä notes.

These and other “usability challenges” are currently being solved in working groups set up by the Union. However, it is certain that regulation around sustainable financing is tightening. At the same time, more is demanded from reporting.

“The bar is being raised and customers are probably expected to provide even more detailed information. It’s a good idea to prepare for this”, Noronen advises.

Kinnunen says that the responsibility of actors and projects, as well as ESG risks, are already being viewed as a whole – in the future even more broadly.

“We are no longer focusing on just one letter. It could be that our operation changes so that we evaluate the responsibility of our customers comprehensively”, Kinnunen adds.

What kind of projects would the internal assessment team for green financing like to see more of?

“This year we evaluated our first biodiversity project. It was an interesting case, related to river restoration. We hope to see more of these”, Noronen says.

Green Finance

MuniFin grants green financing to projects that generate clear and measurable positive climate and environmental impacts. Green financing, that is more affordable than ordinary loans or leasing, has been granted since 2016, and today there are over 300 projects within the financing from Helsinki to Inari.

Read more about green bonds

MuniFin’s new sustainability agenda aims to increase the share of sustainable finance and reduce financed emissions

The sustainability agenda primarily focuses on the long-term impact generated through the MuniFin’s business, i.e., the products and services offered to MuniFin’s customers, the Finnish public sector and affordable social housing sector. It defines a clearer direction and objectives for the company’s sustainability efforts, extending up to 2035. The agenda helps in meeting future regulations and enhances communication and reporting with customers, investors, and other key stakeholders. 

“The sustainability agenda is our way of measuring and communicating what we aim to achieve through our work. Our goals are now more aligned with what we are already doing and what we aspire to achieve in the future,” says Esa Kallio, CEO of MuniFin. 

“We wanted to update our perspective on what is crucial for sustainability in the context of our business and core mandate. We also wanted to set goals and metrics that more clearly describe our essential role in the Finnish welfare society,” adds Mikko Noronen, the Sustainability Analyst involved in developing the sustainability agenda. 

Key themes include supporting the welfare society and accelerating Finland’s green transition 

The sustainability agenda consists of three parts. The first part addresses MuniFin’s business environment from the perspective of sustainable development and how our operations relate to national and international goals. The agenda’s second and most important part includes the actual themes, goals, and metrics for MuniFin’s sustainability efforts. The third part discusses the future of the company’s sustainability work. 

The long-term metrics set include two related to sustainable finance and the company’s first emissions reduction target for financed buildings.  

“MuniFin’s customers play a significant role in achieving Finland’s climate goals. Our most substantial positive impact comes through our business, i.e., the financing we provide. Therefore, we aim for at least one-third of long-term customer financing to be green and social finance by 2030. At the end of June, the share was 18%”, says Noronen. 

During the development of the sustainability agenda, the maximum amount of margin discount offered for green financing was increased as an incentive for even more sustainable projects. 

“However, the most notable change in our sustainability efforts compared to our previous initiatives is the establishment of emissions reduction targets for the buildings we finance. Our goal is to achieve a reduction to 8 kgCO2 per m2 by 2035, which represents a 38% decrease from the 2022 levels. To reach this target, we will maintain continuous monitoring, engage in ongoing dialogue, and facilitate knowledge exchange with our customers”, explains Noronen. 

MuniFin has been developing emissions calculations for a while and, for example, joined the PCAF initiative in 2022. The network’s goal is to develop and implement a unified way of calculating and reporting financed emissions to promote the objectives of the Paris Climate Agreement. By joining, MuniFin committed to measuring and disclosing its emissions within three years. 

In addition to MuniFin employees, customers, investors, and other key stakeholders participated in the development of the sustainability adenda. 

 “We conducted a materiality analysis, which helped clarify our goals and our role even further,” says Noronen. 

In the agenda’s third part, which discusses the future of the company’s sustainability work, there is a commitment to review the goals within two years. 

“Goal achievement will be monitored annually as part of our annual reporting, and goals may be expanded or tightened as necessary. The document will also be updated as business environment changes, such as changes in national or international legislation and best practices in the markets,” Noronen explains. 

“Although the sustainability agenda largely focuses on our external means of impact, our employees remain the most crucial implementers of sustainability. Therefore, it is increasingly important for us to invest in developing a culture of sustainability and expertise,” says Kallio. 

Explore MuniFin’s sustainability agenda: 

MuniFin is a pioneer in sustainable finance in Finland 

In 2016, the company became the first financial institution in Finland to offer green finance for climate and environmentally friendly projects and was the first Finnish issuer of green bonds. 

In 2020, MuniFin was the first financial institution in Finland to issue social bonds, which is offered to projects that promote equality, communality, safety, welfare, or regional vitality. 

Learn more about green and social bonds. (link) 

For more information: 

Antti Kontio 

Head of Funding and Sustainability 

+358 50 3700 285 

MuniFin issues a record-breaking EUR 1 billion green bond

The mandate was announced on Tuesday 14 February and the books were opened the following morning at mid-swaps -1bps area. Demand for MuniFin’s first green issuance this year was strong from the outset and the books were finally closed just 2,5 hours later in excess of EUR 2.2 billion. The transaction pays an annual coupon of 3.00% and was priced at mid-swaps -3bps. 

Nearly 80% of the high-quality orderbook was allocated to ESG investors. Otherwise, the allocation was well diversified as 46% went to banks and 31% to Asset Managers. Geographically, Nordics took 37% followed by DACH at 29% and Benelux at 13%.  

“This transaction marks already the 8th green bond issuance in MuniFin’s history, and it is encouraging to see how the demand for sustainable bonds keeps on growing. We are extremely happy with the outcome and the strong support from the ESG investor community. As a new member of the MuniFin Funding and Sustainability team, this was also personally exciting for me as this was my first large issuance to be involved in since I joined MuniFin”, says Analyst Aaro Koski. 

With this record-breaking green bond MuniFin has issued approximately 40% of this year’s EUR 8-9 billion long-term funding target.  

Read the press release:

Transaction details

Issuer:Municipality Finance Plc (“MuniFin”)
Ratings:Aa1 / AA+ (both Stable) by Moody’s / S&P
Size:EUR 1,000,000,000
Coupon:3% annual, Actual/Actual (ICMA), following unadjusted
Pricing Date:15th February 2023
Payment Date:22nd February 2023
Maturity Date:25th September 2028
Mid Swap Spread:-3bps
Joint Bookrunners:CACIB / Danske Bank / HSBC / NatWest Markets

Comments from bookrunners

“Credit Agricole CIB is proud to have assisted MuniFin with its successful return to the green bond market. MuniFin not only achieved an outstanding result in terms of tight pricing and diversified high-quality investor demand, it also raised the bar on the green bond issue size of EUR 1 billion – the largest EUR green bond in the Nordic SSA market to date. Credit Agricole CIB would like to congratulate the MuniFin team for its longstanding commitment to Sustainability and for continuously supporting the development within the Nordic region and on a global scale.” 

Lawrence Duquesne-Garner, Managing Director, SSA Origination, Credit Agricole CIB

“This is a fantastic outcome for Munifin and a testament of the quality in their recently updated green bond framework. We are pleased to see a Munifin being able to attract such a strong order book with pricing through their EUR curve despite an uncertain market backdrop. Danske Bank is proud to have supported Munifin with the framework update and as a lead manager on the first green bond issue thereafter.”  

Gustav Landström, Head of SSA Origination at Danske Bank

“A stellar result for MuniFin, capitalizing on constructive market conditions to print its largest ever green benchmark. Today’s deal highlights the strong following MuniFin receives from the global investor base as well underlining MuniFin’s strength as a green issuer. The deal was 2x oversubscribed, allowing pricing to move 2bps through execution and price with a minimal new issue concession. HSBC is proud to have helped lead this transaction. Congratulations to the MuniFin team.”

Sabrina Khalfoune, SSA DCM, HSBC

“With this transaction, MuniFin have issued their largest green benchmark to date. This represents an ongoing commitment from MuniFin to create large liquid benchmarks in Green format and also highlights an increased engagement from the investor community. The latter point is evidenced by a 2x oversubscribed book and issuance at fair value. ESG is at the core of NatWest’s business model and we are incredibly proud to have been involved in this issuance.”

Damien Carde, Head of FBG DCM, NatWest Markets

Finance for Finland’s green transition

MuniFin has offered its customers green finance for sustainable investments since 2016. Funding for green projects is sourced by issuing green bonds. For investors, MuniFin’s green bonds offer a way to finance positive impacts through carefully selected projects in buildings, transportation, renewable energy and water and waste water management categories. 

Read more about our green bonds

Further information 

Joakim Holmström – Executive Vice President, Capital Markets and Sustainability 

+358 50 4443 638  

Antti Kontio – Head of Funding and Sustainability 

+358 50 3700 285 

Karoliina Kajova – Senior Manager, Funding 

+358 50 5767 707 

Lari Toppinen – Analyst, Funding 

+358 50 4079 300 

Aaro Koski – Analyst, Funding

+358 45 138 7465

European Commission approved an extension and amendments to the Finnish aid scheme to support municipal energy companies

The European Commission approved on 21 December 2022 an extension to the Finnish subsidised loan and guarantee scheme that allows MuniFin and municipalities to finance municipal energy companies. The Commission also extended the arrangement’s scope of application. The recently approved amendments to the scheme are in place until the end of 2023.

The aid scheme is related to the effect Russia’s war against Ukraine has had on European energy markets. Under normal conditions, EU State aid rules prohibit MuniFin from financing energy companies, but this scheme was approved under the Temporary Crisis Framework to ensure the continuity of the energy sector’s operations and strengthen Finland’s security of supply.

The Commission first granted MuniFin and Finnish municipalities license to finance municipal energy companies in October 2022, but this decision was only effective until the end of 2022. Under the arrangement approved in October, financing could be granted only towards liquidity needs related to the collateral requirements on the derivatives exchange, spot market, balancing market and bilateral trading.

When MuniFin, the Municipal Guarantee Board and the Ministry of Economic Affairs and Employment notified to the Commission of the recently approved scheme for 2023, they extended the arrangement’s scope to cover other potential crisis situations in energy companies. These include the elevated liquidity needs arising from the energy crisis that are related to working capital and investments.

Best prepare in advance

“We’ve been getting some inquiries about municipal energy companies’ financing, and we’re currently processing a few loan applications. We encourage both municipalities and their energy companies to prepare for possible financing needs in advance”, says Aku Dunderfelt, Executive Vice President, Customer Solutions at MuniFin.

MuniFin can finance energy companies either directly or through the municipalities that own them. MuniFin can finance municipal energy companies directly only if they have a 100% municipal guarantee. This requirement applies to all of MuniFin’s finance to companies under municipal control. MuniFin can process loan applications only after the loan has been guaranteed by the city or municipal council, and the funds cannot be transferred until after the guarantee decision has become legally valid.

Municipalities and their energy companies should prepare for potential financing needs in advance. The municipal council’s guarantee decision does not oblige the loan to be withdrawn if it proves unnecessary.

Loans must meet the Commission’s requirements

Loans granted to energy companies by either municipalities or MuniFin must meet the eligibility requirements set out in the Commission’s decision. These include, for example, the energy company’s written account of how it will allocate the funds to needs specifically related to the energy crisis.

Loan contracts under the recently approved scheme must be signed by 31 December 2023 at the latest. The maximum loan amount per beneficiary cannot exceed either a) the liquidity needs derived from the additional collateral requirements for the coming 12 months or b) 15% of the beneficiary’s average total annual turnover over the last three closed accounting periods. In other financing needs arising from the energy crisis than those derived from the collateral requirements on the energy markets, the maximum loan amount cannot exceed the needs for the coming six months. The maximum maturity of the loans is six years, which is three years more than the maximum maturity for loans under the previously approved scheme. The Commission’s decision also sets out minimum requirements for loan pricing and details other technical requirements.

MuniFin encourages municipalities and their energy companies to read the Commission’s decision carefully when preparing their decisions about energy company loans and to take into account the key principles of and references to the Commission’s decision when formulating their own decisions. The Commission’s decision will be available on the Commission’s website soon.