Green Finance

Landsvirkjun’s Green Finance

In March 2018, Landsvirkjun, became the first Icelandic issuer of Green Bonds when the company issued a USD $200 million US private placement („USPP“) in Green Bond format. The USPP is understood to be one of the first Green USPPs issues.

In September 2020 Landsvirkjun updated its Green Finance Framework. Proceeds from Green Finance instruments issued under the framework will be used to finance or refinance existing and future assets that promote the sustainable, responsible and efficient use of Icelandic natural resources to produce renewable energy. Eligible assets comprise all items on the balance sheet supporting Landsvirkjun’s renewable energy generation activities, including the generation assets themselves, but also capitalised development costs, intangible assets such as water and geothermal rights, as well as projects under construction.

The Green Finance Framework aligns with the four core components of the Green Bond Principles issued in 2018 by the International Capital Market Association (ICMA) and the Green Loan Principles issued in 2020 by the Loan Market Association (LMA):

1. Use of Proceeds
2. Process for Project Evaluation and Selection
3. Management of Proceeds
4. Reporting

The company obtained a second party opinion on its Green Finance Framework from Sustainalytics. The second party opinion states that Sustainalytics is confident that Landsvirkjun is well-positioned to issue green finance instruments and that the Green Finance Framework is robust, transparent and in alignment with the four components of the ICMA Green Bond Principles 2018 and LMA Green Loan Principles 2020.


The Company’s Climate Accounts provide numerical data on the environmental impact of Landsvirkjun’s operations. Data in the Climate Accounts is reviewed and confirmed by an external consulting company. The consulting company confirms that the report contains information on significant environmental aspects in Landsvirkjun´s operations and that the information is consistent with the company´s monitoring of key aspects that can have a significant environmental impact. The Climate Accounts also contain monitoring results as required by the company´s operation permits.

2019 Allocation and Impact Report

The proceeds of USD $ 200 million raised through the USPP under the Green Bond Framework have been fully allocated to two projects, the Theistareykir geothermal power plant and Búrfell II (the expansion of Búrfell hydropower plant). Both projects comply with the Eligibility Criteria of the Green Bond Framework as shown in the table below. Deloitte, the external auditors of Landsvirkjun have issued an assurance report on tracking of the funds raised to their allocation to Eligible Green Projects and on the reconciliation of the amount of funds allocated to Eligible Projects.

Eligibility criteria for use of proceeds

Landsvirkjun engaged CIRCULAR Solutions as an external consultant to perform an annual review. The review details the assessment of compliance of (1) the Eligible Green Projects with the respective Eligibility Criteria, and (2) Reporting Criteria of the Framework. Key results of impact reporting are presented in the table below.

Environmental impact of funded projects

For further information on reporting please see the documents below provided by CIRCULAR Solutions and Deloitte.

For further information on Theistareykir and Burfell powerstations please visit

More information and contact:

Treasury Department