Alecta announced it is investing $75m (€67m) in a blue bond that will contribute to better marine environments around Belize, and also meet the Swedish pension fund’s sustainability and risk/return requirements.
The pensions provider – Sweden’s largest – said the $364m Belize Blue Bond was issued by Platinum Securities, and was a financing of a loan to the state of Belize from US-headquartered firm The Nature Conservancy (TNC).
Ulrika Torell, senior portfolio manager at Alecta, said: “Belize Blue Bond meets our requirements for both long-term sustainability and good returns at a limited risk. The investment in the bond therefore fits well into our investment model.”
Carina Silberg, head of corporate governance and sustainability at Alecta, said: “When a bond like this is issued, the borrower is forced in a very structured way to define their green activities and green assets and set up processes for how these are to be financed and followed up.”
The SEK1.1trn (€105bn) pension fund said the bond would allow Belize to reduce its debt by about 12% of GDP, by using it to settle existing obligations, while also generating approximately $180m for maritime protection.
Alecta said the financing of green and blue bonds was linked to specific projects that were considered sustainable, and where the effect was specifically defined, measured and followed up, adding that TNC’s framework for blue bonds was being used in this case.
The firm said for each investment, it assessed both the benefit associated with the bond and the return potential.
In January 2019, Folksam, AMF and AP3 were among the Swedish pension funds that invested in a five-year blue bond issued by the Nordic Investment Bank (NIB), the first of its kind issued by the bank.
NIB said then that the proceeds of the Nordic–Baltic Blue Bond would go to support its lending to selected water management and protection projects.