Green Bond Fact Sheet

City of Reykjavik

Date: 10-Jan-2019

Issue date: 17-Dec-2018 Maturity date: 21-Oct-2048 Tenor: 30
Issuer NameCity of Reykjavik

Amount Issued

ISK4.1bn (USD33m)

Country of risk

Iceland

CBI Database

Included

Issuer Type1

Local government

Bond Type

Senior unsecured

Green Bond Framework

Link to GB Framework

Second party opinion

CICERO

Certification Standard

Not certified

Assurance report

N/A

Certification Verifier

N/AGreen bond rating

N/A☐ Energy☐ Solar☐ Onshore wind
☐ Offshore wind
☐ Geothermal☐ Hydro☐ Tidal☐ Biofuels☐ Bioenergy☐ District heating☐ Electricity grid

☐ Energy storage☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☒ Buildings☒ Certified Buildings☐ HVAC systems☐ Energyperformance☐ Water performance☐ Energy storage/meters☐ Other energy related☐ Industry: components☐ Adaptation & resilience☒ Transport☒ Electric vehicles☒ Low emissionvehicles☒ Bus rapid transit☒ Passenger trains☒ Urban rail

☐ Freight rolling stock☒ Coach / public bus☒ Bicycle infrastructure☒ Energy performance☐ Transport logistics☒ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Water & wastewater☐ Water distribution☐ Water treatment☐ Wastewatertreatment☐ Water storage☐ Storm water mgmt
☐ Desalinisation plants☐ Erosion control☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☒ Waste management☒ Recycling☐ Waste prevention☐ Pollution control☒ Landfill, energy capture☐ Energy performance☒ Infrastructure☐ Waste to energy☐ Industry: components☐ Adaptation & resilience

Use of Proceeds☒ Land use & agriculture☒ Afforestation/parks☐ FSC Forestry☐ FSC Cellulose &paper☒ Land remediation☐ Energy/water efficiency☐ Sustainable agriculture☐ Adaptation & resilience☒ Other☒ Adaptation &resilience☐ ICT☐ Industry: process

Issue details
Reporting

The City of Reykjavík will communicate how proceeds were allocated to Eligible
Projects in its Annual Green Bond Impact Report. An external auditor will verify theallocation of funds.
The environmental impact from funded projects will be estimated by internal
and/or external sustainability experts and reported through annual Impact Reports
for investor documentation.
The reports will be published on the City of Reykjavík’s website and other relevant
media and investor forums.

Company information

The City of Reykjavík is the capital of Iceland. The city has approximately 130,000
people, roughly 35% of Iceland’s total population. It is responsible for public
infrastructures such as public schools, roads, swimming pools, libraries, socialwelfare, museums, waste collection, and public transport.
The City of Reykjavík has established a climate policy along with its environmental
and natural resource policy in order to reach its sustainability goals of carbon
neutrality by 2040. Both electricity and space heating in the City of Reykjavík isprovided with renewable energy resources (geothermal and hydro from nearby
power plants). This leaves the transport sector as the main contributor ofgreenhouse gases. The city’s goal is to have automobile traffic and public transport
free of direct greenhouse gas emissions by 2040, which will be the main objective
to reach carbon neutrality. Another key priority is to improve infrastructure forelectric vehicles, cycling and public transport within its geographical limits. By
2025, 100% of vehicles owned by The City of Reykjavík will be powered by energy
free of direct greenhouse gas emissions.

Firsts, records andcertifications

The first Icelandic municipality to issue a green bond and the first green bond to be listedon Nasdaq Iceland’s Sustainable Bonds List.

Proceeds description

According to the issuer, approximately 70 to 100% of the first issuance will be used
for refinancing recent eligible projects (from 2016-2017).
•New and retrofitted buildings expected to have a “Very Good”, “Excellent”,
or “Outstanding” BREEAM rating, which follows market standards. Therequirement to include the following is ambitious and in line with the City’slong-term policy goals:
o A screening for climate risk and resilience included in the design.
o Electricity and space heating from 100% renewable energy
sources.
o Solutions for a car-free living and electric charging stations fuelledwith 100% renewable energy sources.

•Climate Bonds view

Clean transportation: Covers a variety of methods. Should avoid fossil-fuelbased solutions.
• Waste management: Waste collection vehicles using renewable energy is agood addition to the more typical waste processing and methanecollection projects.
• Sustainable land use: Wetland reclamation, forestry and densification, anddocumentation of biodiversity.
• Energy efficiency: Also linked to transportation, e.g. retrofitting led bulbs
for street lighting. The explicit exclusion of fossil fuel based technologies iscommendable.
• Adaptation: A growing area of concern, it is interesting to see this is apriority for the City of Reykjavik.
The City of Reykjavik has a good set of commendable targets, and its Green Bond
Framework receives a Dark Green shading in CICERO’s SPO. In addition to green
buildings, it would be good to see more quantifiable requirements for projects inother areas.

Underwriters
Deal comments

1

Credit Rating

N/A

Pricing summary

N/A

Investors summary

N/AIssuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign