Green financing of airports – Swedavia’s new framework casts light on global developments

Municipal bonds have long, and often, been a relatively safe and popular method of investing in infrastructure, including airports, and they are particularly popular in the United States.

But increasingly over recent years a particular type of financial instrument, the 'Green Bond', has become more attractive still as the desire to combat 'climate change' allegedly caused by the air transport business invaded and captured the boardroom without a shot being fired.

It has reached the point where the first question asked about any new piece of infrastructure at an airport is not "how much will it cost?", but "how green is it?"

Such is the fear of consequences if ESG/DEI-worshipping institutional investors are offended by the lack of greenery.

Hence, a liaison has formed between the demand for green bonds and the propensity to build on existing airports selectively - a terminal here, a car park there, a people mover between them - by way of public-private partnerships (PPPs). (And all of them with solar panels built in, where possible).

The green bond needs some explaining.

For starters, it is nothing to with the colour of the bonds naturally, nor of the type of bond per se - rather it reflects the type of project,, and how its attributes attract finance. There are very few airport PPPs today that are not dictated by the environmental principles in the design.

This report, in a fairly deep dive into the subject, attempts to analyse the various aspects of the financing package, including how green financing aligns with existing international frameworks and time-tested procedures, how it is manifested in environmental architecture, and what the downsides can be.

And it does so by direct reference to the issue of green bonds by the Swedish state airport operator; in what is one the 'greenest countries' on Earth.

The report also makes reference to the weakening of the global obsession with net zero, and asks what might happen if the main 'sponsor' of such activities, the United Nations and its agencies, should fold.