Green Bond Fact Sheet

Issuer Name: Reykjavik Energy

Date: 20-Feb-2019

Issue date: 18-Feb-2019 Maturity date: 18-Feb-2055 Tenor: 36
Issuer Name

Reykjavik Energy

Amount Issued

ISK3,528m (USD29m)

Country of risk

Iceland

CBI Database

Included

Issuer Type1

Government-backed
entityBond TypeGreen bondGreen Bond Framework

Framework

Second party opinion

CiceroCertification 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
ReportingReykjavik Energy (OR) will issue an annual Green Bond Impact Report, which will be publishedat the same time as its Annual Report. It will include updates on aggregated project funding
under the framework; funds allocated to project categories; unallocated proceeds; proceeds
allocated to new versus refinanced projects; environmental impact of each funded project(or project category), using metrics relevant to the project or project category; and therefinancing ratio. Large projects will be listed individually; smaller projects will be aggregatedunder project categories, and relevant data made publicly available. An external auditor
confirms that net proceeds are used for funded projects; the external audit is also
communicated through the Annual Green Bond Impact Report.

Company information

Reykjavik Energy (OR) is Iceland’s largest geothermal energy producer. OR employed 509
people in 2017 and is powered 99% with renewable energy. It is the parent-company of ON
Power (energy generation), Veitur (utilities and distribution) and Gagnaveita Reykjavikur(Reykjavik’s fiber network). It owns and/or operates cold water supply, hot water supply(district heating), sewerage, electricity generation and distribution, and fibre-optic network
assets. ON operates two geothermal plants (303 MW and 120 MW) and one small hydroplant; it is the second largest producer of power in the country and the largest producer ofgeothermal power.

Firsts, records andcertificationsFirst Icelandic issuance in 2019 (only the third bond & issuer overall)

Proceeds description

Proceeds will be used to fund anticipated projects in eight eligible categories: renewableenergy (25%), energy distribution and management (25%), carbon capture and storage at
its geothermal power plant (5%), sustainable land use and environmental management(5%), clean transportation (5%), sustainable water and wastewater management (20%),
circular economy activities that lead to lower lifecycle energy and GHG use (5%), andproducts and technologies that support smart grid applications (10%).

Climate Bonds view

We are happy to see the Icelandic green bond market expanding to include the second
government-backed entity green bond issuer. Reykjavik Energy is an example of a groupwith quite ambitious environmental targets, with green bond issuance fitting well withinthese. Despite the focus on energy (especially geothermal), it’s a positive that proceeds are
expected to be spent in several different areas, including wider initiatives such as circular
economy activities. This suggests the issuer is thinking about its business model holisticallyand plans to adjust its strategy accordingly.

Underwriters

N/A

Deal comments
Credit Rating
Pricing summary

N/AInvestors summary

1Issuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign