MuniFin expands its green finance to new project categories

MuniFin has updated its green and social bond frameworks. The updated frameworks aim to better promote investments that support sustainable development and to bolster the role of municipalities in building a sustainable future. The revised Green Bond Framework introduces new project categories that make biodiversity and climate change adaptation projects eligible for green finance.

In the 2025 Green Bond Framework, the key changes from the 2022 edition include new project categories as well as stricter and more ambitious criteria for green finance. The new categories extend eligibility for green finance also to investments that improve biodiversity. These can include for example municipal projects that naturalise habitats or restore streams, rivers and wetlands. The updated framework also covers projects aimed at climate change adaptation.

The updates to MuniFin’s Social Bond Framework, first introduced in 2020, serve to harmonise MuniFin’s frameworks for sustainable financial instruments and clarify the criteria for this type of financing.

Stricter conditions for construction

Alongside the new project categories, the updated Green Bond Framework includes revised criteria for green construction in preparation for upcoming legislation. In new buildings, significant changes include the obligation to provide a climate declaration, i.e. a carbon calculation, and meet a defined maximum carbon threshold.

“This update is a natural continuation of the remarkable progress already made in improving the energy efficiency of buildings. Because of the strides already made, it was only natural to revise the criteria to put more emphasis on the carbon footprint. Green bond investors are also demanding stricter criteria and wanting to invest specifically in pioneering projects”, says MuniFin’s Sustainability Manager Elina Sääskilahti.

Green finance since 2016

Launched in 2016, MuniFin’s green finance supports investments that are sustainable for the climate and environment. By the end of 2024, MuniFin had granted about 8.4 billion of green finance, enabling 576 projects that support sustainable development. MuniFin grants green projects a margin discount – the greener the project, the larger the discount.

MuniFin’s 2025 Green Bond Framework replaces the previous edition from autumn 2022. The expectations of green bond investors, the changes in legislation and the development of municipal projects’ environmental features were used as signposts for the new edition. The Shades of Green assessment of the framework remains at Medium Green.

“MuniFin’s ambition to promote the green transition and support Finland’s climate goals has been central to shaping the new framework. We aim to remain at the forefront of green finance and a trusted partner for our customers on their sustainability journey”, says MuniFin’s CEO Esa Kallio.

MuniFin funds its green finance by issuing green bonds. In recent years, these bonds have been multiple times oversubscribed. The green and social bond frameworks define how the proceeds from green and social bonds are allocated to customers’ sustainable projects. They set the parameters for granting sustainable finance, assessing projects and reporting.

Many thanks to Danske Bank for their collaboration in the update process.