Did you know?
We have a dedicated Sustainable Finance Advisory team
that supports large corporates and institutions.
What are green loans?
You might have come across the term “green loans” and wondered how financing can be categorised based on its environmental features. In this short explainer, we examine the mechanisms behind this type of loan.
When the term “green” is used to describe a loan, it mostly refers to corporate loans used to finance specific projects or activities that contribute to environmental objectives, such as reducing CO2 emissions, developing climate-friendly technology or otherwise supporting society’s transition.
Examples of green loans to companies:
- A loan to build a solar park
- A loan to build an energy-efficient building
- A loan to construct, operate or extend water cleaning technology
What does Nordea define as a green loan?
Green loans from Nordea are loans that meet the criteria in Nordea’s green funding framework, which is based on internationally recognised green bond standards.
For the loan to qualify as green, the borrower needs to document that the loan proceeds will be used to finance specific projects or activities that meet the criteria of Nordea’s green funding framework. You can find more information about the framework on this page, where you will also find our total corporate sustainable finance product offering.
For personal customers, Nordea offers housing loans within the framework in selected countries. To qualify for the loan, the new home needs to have a certain energy class.
What is the connection between green loans and green bonds?
One way for banks to fund their lending is through issuing bonds. A green bond is a specific type of bond where the money raised is used to finance and/or refinance specific projects or activities, or a portfolio thereof, that contributes to environmental objectives. Banks, including Nordea, typically use green bonds to refinance a portfolio of existing green assets (i.e. loans) that meet the criteria listed in their green funding frameworks.
Green bonds are popular investment objects for large institutional investors, such as pension funds, that want to support environmental and climate-related objectives.
Learn more about our sustainability work
Strategic sustainability priorities
Our strategic vision for sustainability is to be the preferred financial partner in the Nordic transition to net zero – transitioning and growing together with our customers.
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Sustainability
Turning climate ambition into action
As companies move towards a lower-carbon economy, many are asking what a climate transition plan looks like in practice. At Nordea, we support customers through dialogue, advice and financing solutions tailored to their needs.
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Sustainable finance
CIP acquires Ørsted renewable energy platform in a EUR 1.4bn deal with Nordea providing funding
Copenhagen Infrastructure Partners acquires Ørsted's onshore renewables portfolio in one of Europe's largest renewable energy platform financings.
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Customers in focus
Financing the next generation of energy
The collaboration between Nordea and European Energy shows how long-term financial partnerships enable complex renewable energy projects, from solar parks to commercial-scale e-methanol production.
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