HEMSOE ENERGY EFFICIENT PUBLIC BUILDINGS

The project will finance the construction and renovation of energy efficient schools and other public buildings in Sweden, Finland and Germany.

The Energy Performance of Building Directive (EPBD) requires that from 1st January 2028 new buildings owned by public bodies are zero-emission buildings (ZEB). The project, by supporting energy efficient renovations and new buildings that have a significantly better energy performance than the current regulation will prepare this transition.

Given the focus of the project on energy efficient new and existing public buildings, the investments will support the EU's and Bank's priority in the energy sector (energy efficiency) and the EIB's climate action objectives.

The new buildings will prepare the transition of all public buildings to Zero Energy Buildings foreseen by 2028 under the EU Energy Performance of Building Directive (EPBD). In addition, the project supports the Education, Security and Health policy objectives.

The Project addresses a number of market failures. Through energy savings, energy efficiency projects reduce carbon emissions and air pollution, increase comfort, air quality in the buildings, and reduce dependency on energy imports, social and public benefits that are not fully internalised by private investors. The project creates positive externalities through the provision of education, policing and health which benefits the society and the broader economy.

The operation meets an existing demand for new public buildings to catch up with growth of population over the last decade. The Nordic real estate market is characterized by constraints in supply.

The Promoter, a large real estate company with very good experience in developing public and social buildings, will build public buildings with an energy consumption more than 40% better than the required level. The project has a good Economic Rate of Return and is expected to generate good broader social benefit.

EIB financing will contribute to the diversification of the borrower's financing sources and thus strengthen the overall financing position of the company. The EIB loan's tenor and flexible features will support the promoter's cash flow and liquidity management. Furthermore, the Bank's significant support to the promoter will provide positive signalling effect to the capital markets and other bilateral lenders.

Given the relative scale, location and nature of the project in built-up urban areas, all of the buildings are deemed not to have any significant negative environmental or social impact. None of the buildings to be constructed falls under Annex II of the environmental impact assessment (EIA) Directive 2011/92/EU (as amended by the Directive 2014/52/EU). Through the project, new energy efficient buildings, as per the requirements of the Energy Performance of Buildings Directive (EPBD) 2010/31/EU as amended by directive EU-2024-1275, will be constructed and will, after completion, reduce energy consumption and pollutant emissions compared to the business-as-usual scenario (in compliance with the current regulation).

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if at the project appraisal, the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the EIB will require the promoter to apply those rules. Each building construction contract has been awarded separately. Contractors are local companies, usually mid-caps.