STOCKHOLM: The European Investment Bank (EIB) has signed a SEK 3 billion (EUR 300 million) financing facility agreement with Heimstaden Bostad AB. The Swedish residential company will develop eight residential properties in five cities in Sweden, resulting in about 3,300 new affordable homes to rent.

The project is backed by the Juncker Plan’s European Fund for Strategic Investments (EFSI).

The investments will support the large-scale construction of affordable housing, thus addressing the severe shortage of residential units in Sweden’s main cities. Part of the investments include community services such as a new library, as well as homes dedicated to elderly care. The new affordable housing units will also benefit from high-energy performance standards.

Alexander Stubb, Vice-President of the EIB, commented: “We must not underestimate the importance of energy-efficient housing in fighting climate change; our homes and office buildings are the biggest emitters of CO2, bigger even than cars. With the demand for affordable housing continuously on the rise in Sweden, I am glad that the EIB can contribute towards alleviating the issue – and doing so with sustainable housing units.”

European Commission Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “Providing financial support for the construction of affordable homes underlines the importance of the Juncker Plan’s social impact. Heimstaden Bostad will also ensure that these homes highly energy-efficient in line with our climate action objectives, so this is a win-win.”

“As a long term investor, to develop and manage affordable housing with high-energy performance standard is part of our DNA. This project will create value both from a social as well as from an environmental aspect and it is with great pleasure we proceed with this important project in cooperation with the EIB.” said Patrik Hall, CEO of Heimstaden.

The demand for social infrastructure, including housing, is on the rise in Sweden, not only for demographic reasons, but also because of ongoing urbanisation: Swedish cities are among EU’s fastest growing cities. The project supports national and European targets for energy efficiency and contributes to CO2 emission reduction, thus supporting climate change objectives as well as diversification of energy supply objectives in the EU.

The European Investment Bank (EIB) will provide the SEK 3.0 billion financing facility on an unsecured basis, available under a period of three years. Each loan will have a tenor of up to ten years, currency in Swedish krona or euros, floating or fixed rate.