Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698060173962.pdf (Liberia)
1/6 Green Finance Report 2022 Summary Landsvirkjun has established a Green Finance Framework in line with the company’s focus on sustainability and climate action Landsvirkjun’s Green Finance Framework is based on the ICMA Green Bond Principles and the LMA Green Loan Principles.
A second party opinion on the Green Finance Framework has been provided from Sustainalytics stating that the Green Finance Framework is robust, transparent and in alignment with the four components of the ICMA Green Bond Principles and LMA Green Loan Principles Total Green funding amounts to USD 285 m with five outstanding issuances.

The Green Bonds are all issued in the US Private Placement market All new funding has been green finance or sustainability linked since 2018.
Outstanding green bonds currently account for about 29% of Landsvirkjun´s total loans Impact indicators show that the avoided GHG emission in 2021 was 2,664,328 tCO2eq or 0.825 kgCO2eq/USD Green Finance Allocation Reporting As of year end 2022 the Eligible Green Assets amounted to USD 3,231 m. Outstanding Green Finance Instruments amounted to USD 285 m. All proceeds from the Green Finance Instruments have been allocated to the Eligible Green Assets.
Eligible Green Assets Green Funding Amount (mUSD) Instrument Issuance Date Due Date Amount (USDm) Renewable Energy 3.231 Green bonds Mar 2018 Mar 2023 Green bonds Mar 2018 Mar 2025 Green bonds Mar 2018 Mar 2028 Green bonds Nov 2020 Nov 2029 Green bonds Feb 2021 Feb 2030 Total Eligible Green Assets 3.231 Total Green Funding 85 30 20 50 100 285 Percentage of Eligible Green Assets allocated to net proceeds of Green Funding: 9% Percentage of net proceeds of Green Finance instruments allocated to Eligible Green Assets: 100% Deloitte, the external auditors of Landsvirkjun, have issued an assurance report on the Green Finance Allocation Report and confirmed that the preparation of the Eligible Green Assets is in accordance with the Eligibility Criteria as described in the Framework.
The Green Finance Allocation Report and the Assurance Report are included in the appendix.

2/6 Green Finance Impact Reporting Landsvirkjun’s Green Finance climate impact is expressed as avoided greenhouse gas emissions.

The avoided greenhouse gas emissions by using green and renewable energy amounted to 2.7 million tonnes CO2 equivalents on balance sheet basis.
Landsvirkjun‘s climate impact on balance sheet and pro-rata basis Eligible Green Assets (USDm) Generation capacity (MW) Generation output in 2022 (GWh) Avoided GHG emissions in 2022 (tCO2eq) Balance sheet basis 3,231 Pro-rata basis 285 2,146 189 14,629 1,290 2,664,328 235,015 The climate impact is shown both on balance sheet basis and pro-rata basis which is proportional to the amount of outstanding Green Finance Instruments to Eligible Green Assets on the company’s balance sheet.
The avoided greenhouse gas emissions of Eligible Green Assets on balance sheet basis amounted to 2,664,328 tCO2eq or 0.825 kgCO2eq/USD in 2022., on balance sheet basis.

The Green Finance Impact Report discloses the climate impact of Landsvirkjun’s renewable energy assets for the year 2022 in line with the company’s Green Finance Framework and describes the methodology used.

The report is included in the appendix.


3/6 Appendix - Annual Green Finance Impact Report The Green Finance Impact Report discloses the climate impact of Landsvirkjun’s renewable energy assets for the year 2022 in line with the company’s Green Finance Framework.

The climate impact is expressed as avoided greenhouse gas emissions.

Avoided Greenhouse Gas Emissions Landsvirkjun’s Green Asset’s climate impact is shown in the table below.
The climate impact is shown both on balance sheet basis and pro-rata basis which is proportional to the amount of outstanding Green Finance Instruments to Eligible Green Assets on the company’s balance sheet.
At the year end 2022, Landsvirkjun’s Eligible Green Assets amounted to USD 3,231 m and Green Finance Instruments amounted to USD 285 m. Table 1: Landsvirkjun‘s climate impact on balance sheet and pro-rata basis Eligible Green Assets (USD m) Generation capacity (MW)1 Generation output in 2022 (GWh)1 Avoided GHG emissions in 2022 (tCO2eq) Balance sheet basis 3,231 Pro-rata basis 285 2,146 189 14,629 1,290 2,664,328 235,015 The avoided greenhouse gas emissions of Eligible Green Assets on balance sheet basis amounted to 2,664,328 tCO2eq or 0.825 kgCO2eq/USD in 2022.
Climate Impact Calculation Methodology The methodology used for impact calculations is based on relevant international standards and guidelines.2 The customers to which Landsvirkjun supplies electricity have been separated into two groups, industry operating within the European Union (EU) Emissions Trading System (ETS) and other industries and households in Iceland.

The groups have a different role in contributing to the emission reduction target outlined in the EU 2030 climate and energy framework.
The benchmark emission factors for each group were calculated using the International Financial Institution’s (IFI) methodology (combined margin method) and the Harmonized IFI Default Grid Factors Dataset (V3.2).3 The emission factor for each group is multiplied by the group’s share in the total supplied electricity by Landsvirkjun as disclosed in the company’s Annual Report 2022 (see Table 2).

The combined emission factor is 185 gCO2eq/kWh.


Landsvirkjun’s direct (scope 1) emissions are deducted from the benchmark factor to calculate the avoided impact.

According to Landsvirkjun’s 2022 Climate Accounts, the direct (scope 1) emissions amounted to 42,122 tCO2eq or 2.9 gCO2eq/kWh.

Scope 1 emissions are direct emissions from geothermal operations and hydropower reservoirs, fossil fuel use and SF6 leakage from the company’s electric equipment.
Landsvirkjun’s climate account is based on the methodology of the Greenhouse Gas Protocol (GHGP), and has been inspected and verified by Bureau Veritas using the international standard ISO-14064-3, with limited assurance.

Table 2: Supplied electricity and bencmark emission factors for Landsvirkjun‘s customer groups.
Customer group Amount of supplied electricity (GWh) Share of total supplied electricity (%) Benchmark emission factor (gCO2eq/kWh) Industry within EU’s ETS 12,647 Other industries and households 1,982 86.5% 13.5% 214 0 1 2 3 Landsvirkjun‘s Consolidated Financial Statements 2022. International Capital Market Assoiciation‘s and Green Bond Principle‘s Handbook on Harmonized Frameworks for Impact Reporting (December 2020).
Harmonized IFI Default Grid Factors, International Financial Institutions V3.2 Appendix - Green Finance Allocation Reporting As of 31st December 2022 4/6 Eligible Green Assets Green Funding Amount (mUSD) Instrument Issuance Date Due Date Amount (mUSD) Renewable Energy 3.231 Green bonds Mar 2018 Mar 2023 Green bonds Mar 2018 Mar 2025 Green bonds Mar 2018 Mar 2028 Green bonds Nov 2020 Nov 2029 Green bonds Feb 2021 Feb 2030 Total Eligible Green Assets 3.231 Total Green Funding 85 30 20 50 100 285 Percentage of Eligible Green Assets allocated to net proceeds of Green Funding: 9% Percentage of net proceeds of Green Finance instruments allocated to Eligible Green Assets: 100% The amounts for Renewable Energy are reviewed in accordance with Landsvirkjun’s Green Finance Framework issued in September 2020 Deloitte’s Indipendent Auditor’s Assurance Report in relation to the Eligible Green Assets and respective disclosed amounts is included The Green Bonds are all issued in the US Private Placement market 5/6 6/6