1.5 billion in green funding contributes to a fossil-free vehicle fleet
On November 11, Volvofinans Bank issued green bonds worth SEK 1.5 billion. The interest was great and a total of 31 investors bought from the issue. These were the first green bonds issued under the bank's updated Green Framework and represent an important step in the bank's vision and transition to a fossil-free vehicle fleet.
– Many investors want to make sustainable investments and green bonds are a good way. More and more players are offering green bonds, but there is still a shortage of this type of financial instrument. I am proud of our offer to the financial market and that we can be a financial partner to all those who are looking for a green investment alternative. Together, we can contribute to more green cars rolling on the roads, says Lars Norland, Treasurer, Volvofinans Bank.
During October 2020, a record high number of rechargeable cars was registered, 36 percent (12 percent in October 2019). The number of electric and plug-in-hybrid cars has increased by 113 percent until October 2020, of which plug-in hybrids account for an increase of 162 percent and electric cars 44 percent. Volvofinans Bank has doubled its financing within this area in the past year and the largest increase is noticeable on the fleet side, where more than 70 percent of purchases today are electric and plug-in-hybrid cars. This is to compare on the private market of three percent, but this number is expected to increase significantly upcoming years. The funding through the green bonds is earmarked for customers who want to finance their green car. At present, the bank finances approximately 16,500 vehicles, which corresponds to a value of SEK 5 billion.
– It is very important for us to contribute to the transition to a greener vehicle fleet. We see a positive trend that Sweden have reduced carbon dioxide emissions from private cars in 2019. By making it easier for our customers and helping them choose fossil-free cars, thousands of tonnes of carbon dioxide can be saved every year, says Gunnar Ekeroth, Sustainability Manager at Volvofinans Bank.
For more information, please contact
Lars Norland, Treasurer, Volvofinans Bank AB
+46 (0)31-83 88 88, lars.norland@volvofinans.se
Gunnar Ekeroth, Head of Sustainability, Volvofinans Bank AB
+46 (0)31-83 90 49, gunnar.ekeroth@volvofinans.se
On the issue of the green bonds
The green bonds were divided into three transactions at different maturities and interest rates. A three-year and a five-year loan with a variable interest rate and a five-year loan with a fixed interest rate. For the three-year loan, stibor + 0.50 percent is paid and for the five-year term + 0.75 percent (in the fixed-rate loan, this corresponds to 0.86 percent). Volvofinans Bank had as most bids for a volume of SEK 3.8 billion and a total of 31 investors bought the issue.