Light rail facilitates a shift towards cleaner public transportation, and we have provided green loans of DKK 1.1 billion in total for Denmark’s first light rail in the country’s second-largest city Aarhus. By year-end 2020, 7.4 per cent of the total disbursed green loan volume was in this category.
Aarhus Letbane is establishing a network of light rail in East Jutland, which connects cities and districts in the Aarhus area more closely and makes it easier for commuters to get to and from work. The light rail replaces diesel trains on an existing line and adds additional lines. City buses are closing and commuting is rerouted to the light rail, which is expected to lead to fewer cars on the roads. As the first in Denmark, the project is pioneering light rail and is a major infrastructure investment. KommuneKredit has financed the construction costs with ongoing loans of more than DKK 2 billion since 2015. Following the introduction of green loans in 2017, DKK 1.1 billion is green financing.
The first phase involves a total of 110 kilometers and has been in operation since April 2019. In April 2020, Aarhus Letbane announced the results of the first phase. It shows that the replacement of diesel trains and buses with the electric light rail provide annual savings of 4,305 tonnes of CO2, which corresponds to a 70 per cent decrease. Also, local air pollution is decreasing as fewer particles are emitted to the air.
Green loan category
The clean public transportation green loan category covers new investments in and ongoing maintenance of low-energy or emission transportation assets, systems, infrastructure, components and services that facilitate modal shifts from private transportation to increased use of public transportation such as trains, underground trams and buses to the extent that these lead to a reduction in CO₂ emissions. KommuneKredit has disbursed 11 green loans of nearly DKK 1.7 billion in total from 2017-2020.
Total project investment:
DKK 4.3 billion.
Disbursed green loans from KommuneKredit: DKK 550 million in 2017; DKK 400 million in 2018 and DKK 150 million in 2020.
Expected environmental impacts:
▪ 4,305 tonnes in annual CO2 reductions of which around a quarter can be attributed to KommuneKredit’s green loans from 2017-2020.
▪ Expansion of clean public transport.
▪ Clean air and less noise.
Primary EU environmental objective
Climate change mitigation.