BEGINNING OF

CONTINUITY

May 2014

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DISCLAIMER  IMPORTANT: YOU ARE ADVISED TO READ THE FOLLOWING INFORMATION CAREFULLY BEFORE READING, ACCESSING OR OTHERWISE USING THE PROVIDED MATERIALS The content below have been prepared and provided by City of Gothenburg(the “Issuer”). The Issuer is not responsible for that any of the content provided by the Issuer and presented in this presentation, directly or indirectly, may cause any loss or damage to the user or any other person who has taken part of the content. The issuer cannot be held liable in relation to the user or any third party for direct or indirect damages, lost profits or revenues, or for any other harm caused by the fact that the content is in any way incorrect, wrongly displayed or presented or even altogether missing due to errors or other circumstances from the Issuers side or any supplier to the Issuer. This includes all the cases where the displayed information may be delayed, appear incorrectly, appear with incorrect values or be totally absent due to any technical or other reasons. This also includes any loss in earnings (regardless of whether direct or indirect), reductions in goodwill or damage to corporate. The Content that is provided and displayed is intended exclusively to inform any reader and does not represent advice on investment or any other form of recommendation. The content may under no circumstances be seen as any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any debt or other securities of the Issuer (“Securities”) and are not intended to provide to the basis for any credit or any other third party evaluation of securities. Any and all offers or invitations will be done in separate and distinct documentation in form of prospectus or other form specifically produced for the purpose therefore. Any decision made pursuant to such invitation or offer should be made solely on the basis of such documentation. The purpose of these materials is therefore not to be relied upon for the entering into any transactions. The Issuer refuses any claim in this regard.  Investors are advised to pay special and thorough attention to the information in the prospectus or other form of specifically produced documentation. Sections describing risk factors should be carefully read by each investor before making any decision in relation to the offered product. Special attention should be paid to the suitability of any security described in these materials with respect to a particular investor’s situation independently evaluated by such investor himself. Such evaluation should at least take into account such aspects as legal and tax issues, regulator and financial issues, credit and any other aspect which may be considered applicable in such case.  The content below may contain some forward-looking statements which key purpose is to indicate some prospective future scenarios. Taking into consideration all known and unknown risks, uncertainties and other factors which may occur, the Issuer makes reservations herewith that the material outcome may differ from any information expressed, implied or otherwise indicated in such forward-looking statements. Any and all such forward-looking information are based on numerous assumptions regarding the Issuer’s present and future strategies in attempt to show the environment the Issuer will operate in the future. Such forward-looking material is issued and is current on a particular publishing date and the Issuer has no obligation to update such material.  The provided content is not intended for distribution to, or use by any person or entity in any jurisdiction or state where such distribution or use would be against the law or any other regulation.

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1.Background

• Our experience with green bonds 5• Use of proceeds

7• Project selection

8• Investor reporting

10• Second opinion

12

2.Current status

• Current status14

• Next green bond transaction15

• Benefits for investors & City of Gothenburg 16• Possible green projects

18

3.Annex • Financial information about the City of Gothenburg 24

Table of contents_________________________________

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1.Background

• Our experience with green bonds 5• Use of proceeds

7• Project selection

8• Investor reporting

10• Second opinion

12

2.Current status

• Current status14

• Next green bond transaction15

• Benefits for investors & City of Gothenburg 16• Possible green projects

18

3.Annex • Financial information about the City of Gothenburg 24

Table of contents_________________________________

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5

Our experience with Green Bonds

City of Gothenburg first city in the world to issue green bondCity of Gothenburg first in Nordics to issue green bond

According to the World Bank

framework

September 2013

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Lackarebäck water treatment and purification filtersExisting Stage 1 ( annex North ) keeps the works being completed , while installation / mounting of the VA process equipment (pipes , pumps, carbon filters and ultrafilters ) continues until mid- 2014. After that the commissioning of the new processing plant parts. In Stage 2 ( annex South) is the concrete foundation to be erected . The new standby power and switchgear building is completed and commissioned . Construction works is broadly on schedule – with the commissioning of Stage 1 in December 2014 and Phase 2 in October 2015. Impacts:

• Capacity increase by 40 %

• Socioeconomic gains in terms of

lower disease outbreaks which

saves up to 290.000 days in

productivity loss between 2014-2038

• Socioeconomic gains in terms

of  cost savings of 1.4 million hospital

days

Lackarebäck water treatment and purification filtersExisting Stage 1 ( annex North ) keeps the works being completed , while installation / mounting of the VA process equipment (pipes , pumps, carbon filters and ultrafilters ) continues until mid- 2014. After that the commissioning of the new processing plant parts. In Stage 2 ( annex South) is the concrete foundation to be erected . The new standby power and switchgear building is completed and commissioned . Construction works is broadly on schedule – with the commissioning of Stage 1 in December 2014 and Phase 2 in October 2015. Impacts:

• Capacity increase by 40 %

• Socioeconomic gains in terms of

lower disease outbreaks which

saves up to 290.000 days in

productivity loss between 2014-2038

• Socioeconomic gains in terms

of  cost savings of 1.4 million hospital

days

Electric cars

Introduction of electric vehicles is the focus of Gatubolaget. In 2013, the company delivered electric car # 100 to the city committee in Angered. Thus, the City Council’s goal of 100 electric vehicles in the city by 2015 have already been fulfilled. In connection with the introduction of electric cars, Gatubolaget has got four quick charger for electric cars, the last of those coming into place in 2014. Gatubolaget believes there is scope to change most of the city’s passenger car fleet

to electric cars. Impacts:

• reduced use of fossil fuels

Electric cars

Introduction of electric vehicles is the focus of Gatubolaget. In 2013, the company delivered electric car # 100 to the city committee in Angered. Thus, the City Council’s goal of 100 electric vehicles in the city by 2015 have already been fulfilled. In connection with the introduction of electric cars, Gatubolaget has got four quick charger for electric cars, the last of those coming into place in 2014. Gatubolaget believes there is scope to change most of the city’s passenger car fleet

to electric cars. Impacts:

• reduced use of fossil fuels

GoBiGasGoBiGas project aims to gasify wood raw material for the production of biogas that will be distributed at existing gas grid . The project is divided into two stages with a demonstration plant as the first stage and then a commercial facility that second stage . The first phase is designed to produce 160 GWh / year , equivalent to fuel to about 16 000 cars in years , and the second phase is scheduled to produce 640 to 800 GWh / year. The project is run in close collaboration with both academia ( Chalmers ) and suppliers ( Valmet on Lundbystrand , Gothenburg).For GoBiGas project’s first phase started excavation work in 2011 and installation in 2012. The facility is now completed and commissioning is underway. In 2014 , the plan is to get the demonstration plant in continuous operation for evaluating technology choices , function and performance . In parallel with the execution, a major focus was placed on participation in various fora to improve the economic conditions for the production of biogas.

Impacts:

When the plant is in full production, delivery will be 800 – 1 000 GWh, equivalent to fuel for between 80,000 to 100,000 cars.

 150 mkr

30 mkr

300 mkr

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Use of proceeds from the 1st green bond(SEK 500 mln)

City of Gothenburg

Selection Process

City CouncilFinal Approval

Policies & Guidelines

Environmental Department

Treasury Department

Treasury and Environment Departments work side-by-side in project selection process, thus uniting the two areas in a way it hasn’t been done

before.

Treasury and Environment Departments work side-by-side in project selection process, thus uniting the two areas in a way it hasn’t been done

before.

Project Selection

Process

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Project portfolio may include

Mitigation• mitigation of

climate change, including investments in low-carbon and clean technologies, such as energy efficiency and renewable energy programs and

projects 

Adaptation• adaptation to

climate change, including investments in climate-resilient growth 

Sustainable environment

• to a smaller extent (max 20%) projects which are related to a sustainable environment rather than

directly climate related.

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Investor reporting

• Annual investor letter

• Web, finans.goteborg.se

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Regular investor letter

City of Gothenburg is committed to provide an annual investor letter which will be available on City of Gothenburg’s website. The investor letter will include a general summary of City of Gothenburg’s Green Bond development, a list of projects and a selection of project examples.

Earmarked account

An amount equal to the net proceeds of the issue of the Notes will be credited to a special Budget account that will support the City of Gothenburg’s lending for Eligible Projects. So long as the Notes are outstanding and the special account has a positive balance, at the end of every fiscal quarter, funds will be deducted from the special account and added to the City of Gothenburg’s lending pool in an amount equal to all disbursements from that pool made during such quarter in respect of Eligible Projects.

Traceability & Transparency

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Independent Research Center

associated with University of Oslo

CICERO conducts research on and

provides information and advice about

national and international issues

related to climate change and climate

policy

Second opinion

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“What’s considered green is different for everyone. Our investors need to be comfortable…reaching out to Cicero is a great first step.” -Stephen Liberatore, Managing Director at pension provider TIAA-Cref 

“On behalf of our investors, we ask for a second opinion from an environmental specialist called CICERO…we wanted to be sure that the right questions were asked...we also wanted to make sure that the independence of the group that was raising the questions was secure.” 

-Christopher Flensborg, Head of Sustainable Products and Product Development, SEB 

1.Background

• Our experience with green bonds 5• Use of proceeds

7• Project selection

8• Investor reporting

10• Second opinion

12

2.Current status

• Current status14

• Next green bond transaction15

• Benefits for investors & City of Gothenburg 16• Possible green projects

18

3.Annex • Financial information about the City of Gothenburg 24

Table of contents_________________________________

13

New, extended green bond framework

Framework linked to the City’s environmental programme

Projects selected in accordance with long-term environment goals

5 billion SEK

Continuity on the green bond market

One green transaction every year

• Transaction subject to market conditions and internal supply of projects

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Upcoming market transaction

• City of Gothenburg, Aaa/AA+

• Green bond

• Tenor: 5-7 years

• Volume: benchmark size

• FIX & FRN

• Transaction is subject to market conditions

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Investor benefits • City of Gothenburg Green Bonds support mitigation

and adaptation projects selected according to the

framework

• Investors have an opportunity to invest in local

renewable energy, biogas, smart grids, and much more

• Investors benefit from AA+/Aaa City of Gothenburg

rating and the City’s “due diligence” for projects

• Investors are offered market return – no premium

charged for the “green element”

• Project that might be funded through this green bond

issue are listed on next slides

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• Diversify investor base for City of Gothenburg funding

• Create awareness about: • City of Gothenburg• City’s climate efforts• climate change and the need for actions in

all sectors

• Bringing together environment and finance departments internally in organization for better understanding of each others’ needs for future collaborations

Benefits for City of Gothenburg

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Environmental Vision

Reduced Climate

Impact

Good-Quality

Groundwater

A Good Build

Environment

Clean Air Natural

Acidification Only

A Balanced Marine

Environment

Zero

Eutrophication

Flourishing Lakes

And Streams

Sustainable

Forests

A Rich Diversity of

Plant and Animal Life

A Varied Agricultural Landscape and

Thriving Wetlands

A Non-Toxic

Environment

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Electricity• Quiet, emission-free, fuel-efficient electric

buses from Volvo • Electric buss line between Johanneberg

Science Park and Lindholmen Science Park • Project includes future stop solutions, ITS

solutions, security concepts, green depot and energy Solutions

• Testing and demonstrating new ways to use public transport

• Start 2015

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Possible Green Projects

• Solar energy in-house

• Low-energy buildings only

• Only sustainable materials used in

constructions

• Energy-neutral buildings

• Energy generating buildings to come

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Possible Green Projects

• ”Westra pier”electrical efficiency • Teknikcollege Lindholmen- Environmentally certified

building• Inre sannegårde - disposal • Kajskjul 113- Energy efficiency, waste management,

water. • Climate Improvement Program 141: an - Energy

efficiency. • Lindholmshamnen and housing Götaverksgatan bk 10.7

million - Urban planning, waste management, energy efficiency, water supply.

• Disposal plant at Western Eriksbergsvägen-Disposal. • Stop for electric bus - Transport.

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Possible Green Projects

• Gryaab’s nitrogen treatment

• Post-denitrification project

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Possible Green Projects

1.Background

• Our experience with green bonds 5• Use of proceeds

7• Project selection

8• Investor reporting

10• Second opinion

12

2.Current status

• Current status14

• Next green bond transaction15

• Benefits for investors & City of Gothenburg 16• Possible green projects

18

3.Annex • Financial information about the City of Gothenburg 24

Table of contents_________________________________

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AnnexFinancial information about theCity of Gothenburg

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City of GothenburgIn brief

Key characteristics SwedenEmployees 48 000

Inhabitants 526 054

Size Second largest city in Sweden

Turnover SEK 48,0 bn

Debt portfolio SEK 38,6 bn

Ratings Aaa (2006) / AA+ (2007)

Major Sectors Machinery, Automotive, Shipping and Pharmaceuticals

Large companies Volvo Cars, Volvo Trucks, SKF, Ericsson, Astrazeneca, SCA Hygiene Products,

Stena Groupe City of Gothenburg

Responsibilities

Childcare and preschools Primary and secondary education Care of the elderly and disabled Social services Water supply and sewerage Infrastructure, traffic, public transport Plan and environmental issues Rescue services and emergency preparedness.

The municipalities are legally or contractually responsible for example:

Other services provided on a voluntary basis include for example:

Culture and Leisure services Housing Industrial and commercial services.

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Chart

City of Gothenburg – capital market presence

Financial infrastructure Debt portfolioSEK 21.8bn /USD 3.3bn equivalent

EMTN; 17,9

EIB; 3,9

Others; 1

Kommuninvest; 1,3

Framtiden; 14,5

Group maturity profile(SEKbn)

2014 2015 2016 2017 2018 2019 2020 2021 >20210

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Framtiden Staden

City of Gothenburg Framework Outstanding

EMTN EUR 3000M EUR 2000M

Green Bonds SEK 2000M SEK 500M

CP SEK 3000M -

ECP USD 500M -

Credit facilities SEK 9000m -

Kommuninvest - SEK 1300m

Framtiden Framework Outstanding

MTN SEK 10000M SEK 6200M

CP SEK 4000M SEK 2700M

Bank loans - SEK 5200M

Total 38,6 SEK bn

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Public ratingsStandard & Poor’s and Moody’s

AA+ since 2007, stable outlook Predictable and supportive institutional framework Dynamic local economy with solid growth prospects Very positive financial management Sound budgetary flexibility due to a high share of

modifiable revenues Robust liquidity position

÷ Increasing deficits after capital accounts, owing to higher investments.

÷ Potential risks in an adverse scenario, given the very large, albeit mainly self-supporting, group of municipal companies.

Release calendar for rating reports:• March 21• September 19

AA+

AAA since 2006, stable outlook Track record of balanced budgets Rigorous budget controls Solid financial position with a very low, though increasing

net debt burden as the bulk of the city’s debt is related to what to date have been on aggregate self-supporting companies

Downside risks÷ A loosening of the prudent budget discipline, resulting in a

large increase of expenditures, and negative operating margins in combination with a high level of debt-financed investments could put pressure on the rating.

÷ Significant weakening of the importance of local government and consensus with the central government, regarding the delivery of public services, or a downgrade of the sovereign rating could place the rating under pressure.

Release calendar for rating reports:• August 15• December 12

AAA

Market activities 2014

March 2014

May/June 2014

Autumn

2014

SEK 1.7 mdrRedemptions 200 mkrGreen Bond

CHF, EUR, USD?

Bonds or CP?

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Regional companies

Renova

Gryaab

Grefab

Internal service companies

Gatubolaget Kommunleasing

Upphandlingsbolaget

European Office

Göta Lejon

Temporary

Boplats

Göteborg Energi

Gbg Energi Nät FordonsGas

Partille Energi Lerum Energi

Falbygdens Energi

Svenska EnergiAskor

Ale Energi Skövde Biogas

Gbg Energi Gasnät

Gastekniskt Center

Sörred Energi Sävsjö Biogas

GoBiGas EFO

Lidköping Biogas

Gbg Energi Backa

Gbg Energi DinEl

Framtiden

Poseidon

Familjebostäder

Gårdstensbost.

Bostadsbolaget

Egnahem

Rysåsens fastigh.

Störningsjouren

HIGAB

Älvab

Scandinavium

Göteborgslokaler

Parkeringsbolaget

BRG

Lindholmen ScP

Johanneberg ScP

Gbg Tekninska College

Cityflygplatsen i Gbg

UNO

Gbg & Co Kommunintresse

nt

Gbg & Co Träffpunkt

Got Event

Liseberg

Stadsteatern

Gbg Hamn

Scanport Insurance

Gbg Stuveri

Scandinavian Distripoint

Gbg Port Operation

Gbg Spårvägar

Buss

Trafikantservice

Spårvagn

Göteborgs Stadshus AB

Corporate structure of City of Gothenburg

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Structure of public sector spendingCity of Gothenburg

Key focus areasSpending – City Of Gothenburg

Healthcare

Childcare

Municipal housing

Care for the elderly and disabled

Schooling for children and youth

Law, order and security

Sanitation and waste management

Energy supply

Water supply and sweage

Construction issues

Infrastructure

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Constitutional system

Central Government

30% of public sector spending

Local Government

70% of public sector spending

International Debt Markets

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Strong institutional framework

Requirement for sound financial management

Balanced budget requirement

Local government financing principle

Financial equalisation

Local governments must work according to a sound financial management

Annual local government budgets should normally be in balance, imbalances must be restored within 3 years

If the government alters the tasks of local governments, the governments must also neutralise their financial effect

Imbalances between local governments are equalised annually through income and cost equalisation schemes

Law: “Kommunallagen chap. 8 §2(1991:900)”

Law: “Kommunallagen chap. 8 §4-5 (1991:900)”

Approved by the government and in force since 1972.

Law: “Lagen (2004:773) om kommunalkekonomisk utjämning

According to the Swedish Bankruptcy Act a local government cannot be declared bankrupt since they do not fulfil the criteria of being insolvent. This is due to the fact that the local governments have the constitutional right to levy taxes. The Swedish Court has stated that the local governments in Sweden are not covered by the Bankruptcy Act. (RH 1996:75). This view is supported by the Swedish legal doctrine.

Financial prudence explains Sweden’s strong public finances and low levels of public debt

Investor relations

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http://finans.goteborg.se

Göteborgs Stad och miljö:

Link

ContactsInvestor relations

Mr. Magnus BoreliusHead of Group TreasuryTel: +46 31 368 00 23magnus.borelius@stadshuset.goteborg.sese.linkedin.com/in/magnusborelius

Funding

Mr. Danijel AfolterPortfolio ManagerTel: +46 31 368 06 04danijel.afolter@stadshuset.goteborg.sese.linkedin.com/in/dafolter

Ms. Frida SvenssonPortfolio ManagerTel: +46 31 368 04 67frida.svensson@stadshuset.goteborg.se

http://finans.goteborg.se Bloomberg ticker: GOTA Govt

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