Elenia will use the framework to issue EUGBS-aligned green bonds. SEB acted as the sole sustainability advisor in establishing the framework.
The EUGBS is a voluntary standard developed by the European Commission and overseen by the European Securities and Markets Authority (ESMA). It entered into force at the end of 2024 and relies on the EU Taxonomy – a European classification system outlining criteria for sustainable economic activities. This means that the funds raised through EUGBS-aligned bonds must be allocated to economic activities that align with the Taxonomy.
In addition to aligning with the EUGBS and the EU Taxonomy, Elenia’s framework is also compliant with the International Capital Markets Association’s (ICMA) Green Bond Principles. Proceeds from bonds issued through Elenia’s new framework will be allocated to projects that will support sustainable electrical infrastructure in Finland.
“As heating, industry and transport become more electrified, Finland needs a reliable electricity grid and network services with flexible solutions alongside growing renewable electricity production,” says Tommi Valento, CFO at Elenia.
He says this will require investments of 2.4 billion euros from Elenia by 2036, and therefore the availability of affordable financing is essential. The green financing framework is an important step for the company as it moves forward with the electrification of society.
“Being a stricter standard than those used previously, EUGBS is a great opportunity for companies to showcase high sustainability ambitions and high Taxonomy alignment in their business,” says Anssi Kiviniemi, Head of Sustainable Banking at SEB in Finland.
The new EU Green Bond standard is an example of sustainable finance regulation catching up with best market practice for issuance of green bonds and is a good compliment to the existing ICMA Green Bond Principles.
“By complying with both, Elenia is creating the foundation for the next generation of higher-quality green bonds,” says Lars Eibeholm, Head of Sustainable DCM at SEB.
S&P Global Ratings conducted the independent external assessment of Elenia’s framework. Based on the environmental impact of the funds allocated under the framework, S&P Global Ratings has awarded the framework the highest possible review (Dark Green).
Read more in Elenia’s press release: Elenia is the first Nordic company to adopt a green finance framework aligned with the EU Green Bond standard - Elenia