Scania Issues Green Bond to Finance Further Investment in Electrification
To support its continued investments in electrification, Scania issued another green bond, this time totalling SEK 3 billion. The proceeds will be used for additional investment in the development of battery-electric vehicles. The strong interest in the bond shows that the capital market actively supports Scania’s purpose of driving the shift towards a sustainable transport system.
Scania has issued a second green bond, as part of the company’s efforts to deepen its investment in electrification technologies. In 2020, Scania became the first manufacturer of commercial heavy vehicles to receive approval for its framework for issuing green bonds, with the proceeds of its first bond being invested in the company’s battery factory and the development of battery-electric vehicles.
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Around 20 Nordic banks, insurance companies and pension fund managers participated in the bidding for Scania’s new green bond. Proceeds are being channelled to projects that will have a profound impact in reducing CO2 emissions, and will finance Scania’s continuous research and development of battery-electric vehicles.
“The development we see, where the financial community is taking part in driving the shift towards sustainable transports, is reassuring. We believe the interest in green investment needed to phase out fossil dependence in the world will continue to grow,” says Scania’s Chief Financial Officer Jonas Rickberg.
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The world is in the midst of an energy crisis, but long-term investment in electrification charging infrastructure remain vital, as larger volumes of battery-electric vehicles in the future will enable fossil-free transport to happen.
“The need for investment to secure the transition to fossil-free transport is huge. We will use the green bond for continuous investment in electrification, since battery-electric vehicles are expected to constitute half of our sales in 2030,” Rickberg explains.
The Green Bond Framework constitutes the basis for identifying, selecting, verifying and reporting projects that are eligible for financing by green bond proceeds. The Norwegian company CICERO Shades of Green, a leading environmental assessor of green and sustainability bond frameworks, has rated Scania’s framework ‘dark green’, which applies to projects and solutions that correspond to the long-term vision of a low-carbon and climate-resilient future. In accordance with the Green Bond Principles, proceeds will be managed in separate accounts and the allocation will be transparently reported, along with the carbon savings that have been obtained.
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