Questions & answers

Although borrowing can be considered neither right nor wrong, it is good to have the opportunity to do so when necessary. Generally speaking, long-term borrowing for consumption is not advised, but in the short term borrowing can be beneficial in order to stimulate the economy. Loans for investment can be useful since they lead to increased income in the future.

The central government debt varies over time. In the last ten years, it has been between SEK 1,000 billion and SEK 1,400 billion. Measured as a proportion of gross domestic product (GDP), the central government debt has decreased from over 70 per cent in the mid-1990s to 16 per cent at the end of 2023. The Debt Office reports the outcome of the central government debt once a month, which can be monitored here.

What is known as the Maastricht debt, which comprises the whole general government sector, was just over 30 per cent of GDP at the end of 2023. This is a low level from both a historical and international perspective. Statistics Sweden reports the Maastricht debt statistics.

There are no political ambitions to pay off the entire central government debt in Sweden. Nor is there any future time when the debts must be paid. An important difference between an individual who borrows and a government that does so is that a government is expected to continue to exist and receive tax revenue, whereas a person's income can cease. 

For the central government, there is no saving objective as there is for the entire general government sector – the central government, local governments, and the pension system – for which the current saving (net lending) objective is 0.33  per cent of GDP on average per business cycle.

Interest payments on central government debt are financed through the central government budget, and loans that mature are paid for by raising new loans. The central government’s biggest asset is future tax revenue. The most important factor for payment capacity is for tax revenue to be sufficient for covering all the government’s obligations, in terms of both expenditure and the repayment of debts.

Sweden currently has stable government finances, but during the early the 1990s they were weak and the central government debt rose sharply. A rapid rise in the central government debt can create a fear that the government will not be able to cover its obligations, which can in turn have a significantly adverse impact on the country’s entire economy. Interest rates go up as the risk for lenders increases.

Historically, insurance companies, pension institutions, and foreign investors have owned the majority of the securities issued by the Swedish state. In 2020, however, the Riksbank surpassed foreign investors as the largest holder, after having purchased government bonds for several years. The Riksbank began selling off its government-bond holdings in 2023 but remains the largest owner. The statistics on the securities holdings are compiled in Statistics Sweden’s Financial Accounts.

Even with a well-functioning financial market, there may be challenges in financing environmental investments involving loans with longer maturities.

To be eligible for a guarantee, a loan must amount to at least SEK 500 million.

The central government shares the risk with the lender and guarantees up to 80 per cent of the loan.

Credit institutions can apply for risk coverage for loans to companies. 

The maximum maturity of a guarantee is 15 years. There is not a predetermined repayment schedule.

The industrial investment must be in Sweden and must meet the criteria specified in the ordinance (2021:524) on state credit guarantees for green investments.

You will find the application form and instructions on our website.

The borrower pays interest to the lender as usual. The lender in turn pays a guarantee fee to the Debt Office based on the borrower’s creditworthiness in accordance with the ordinance (2021:524) on state credit guarantees for green investments.

The fee that the Debt Office charges under the ordinance (2021:524) on state credit guarantees for green investments must be consistent with the market. For the Debt Office, this means that the fee is made up of an administrative fee as well as a guarantee fee consisting of a fee for expected loss and a premium to ensure that the fee is market-based and thereby no state aid is involved.

The administrative fee is to cover the costs incurred by the Debt Office in issuing a guarantee. It must also cover the Debt Office’s continual costs for managing the guarantee during its term to maturity.

The part of the guarantee fee that is set in relation to the state’s expected loss is based on the borrower’s creditworthiness. Significant factors that are also taken into account and that affect the size of the fee for expected loss are, among other things, collateral and the guaranteed loan’s maturity and repayment (amortisation) structure.

The guarantee fee also contains an allowance to ensure that the fee is consistent with the market. The Debt Office needs to compensate for the difference in capital requirements for itself and private actors. The Debt Office also makes a market-based adjustment of the fee.

See section 8 of the ordinance (2021:524) on state credit guarantees for green investments for more information.

The administrative fee must be paid at the time of the issuance of the credit guarantee.  

The guarantee fee must be paid at the time of the first disbursement of the loan or, at the latest, in conjunction with the respective loan disbursement. 

The Debt Office will, as a starting point, use the taxonomy developed by the European Commission as an essential tool for the evaluation.

See also the programme report on the environmental evaluation produced in collaboration with the Swedish Environmental Protection Agency, available on the Debt Office’s website.

The programme report (only available in Swedish)

There are no general delimitations in the regulations governing the Debt Office’s work with the green credit guarantees.