Debt Office decides on first green credit guarantee

Press release 25 April 2022

The Swedish National Debt Office has decided to issue a credit guarantee to AB Svensk Exportkredit (SEK) for a loan of 3 billion kronor within the framework of the guarantee scheme for large green industrial investments. The investment is for converting Preem’s refinery in Lysekil in order to produce diesel from renewable raw material.

In the revamped Synsat plant, 40 per cent of the raw material will be renewable instead of fossil-based. This means that the carbon dioxide emissions at the user level can be reduced by around 1.7 million tonnes per year, according to Preem’s calculations. That can be compared with Sweden’s total emissions, which in 2020 amounted to approximately 46.3 million tonnes of carbon dioxide equivalents, with domestic transport accounting for around one-third of those emissions.

The project is part of Preem’s planned shift to a climate-neutral operation with net-zero emissions across the entire value chain by 2035 at the latest.

“This is the first guarantee that the Debt Office has decided to provide under the state green guarantee scheme. The conversion to fossil-free industry is important for Sweden to be able to achieve its climate and environmental goals, and it is good that we can contribute to more sustainable fuel production and reduced import of oil,” says Karolina Ekholm, Debt Office Director General.

To be eligible for a green credit guarantee from the central government, an investment must contribute to the objectives of Sweden’s environmental and climate policy. The Debt Office conducts its environmental evaluation based on the criteria set out in the regulation.

The Debt Office’s assessment is that Preem’s investment in the Synsat plant in Lysekil fulfils the environmental criteria for a green credit guarantee, provided that the requisite environmental permits are obtained. Decisions on environmental licencing for the project in question are made by the Land and Environment Court. The Debt Office’s decision is therefore conditional on such necessary environmental permits being obtained.

The loan runs for 7 years as does the guarantee, which covers 80 per cent of the loan amount.

Read more about the Debt Office’s mandate to provide green state credit guarantees, and which criteria form the basis of the environmental evaluation, on the Debt Office’s website.