Gothenburg

Sweden

Mission city Pilot city
Sweden National Platform
Gothenburg Mission City Label
Population 582k
City Area 450 km²
City active since June 2022

Gothenburg, Sweden's second-largest city, holds a strategic position at the heart of Scandinavia, nestled between Oslo and Copenhagen.

 

With a current population of 631,000 residents, Gothenburg serves as a pivotal hub for the Västra Götaland Region, renowned for its robust industrial base and Scandinavia's largest port. As the City embarks on a trajectory of growth, with plans to accommodate 700,000 residents by 2035, the imperative of sustainable development takes centre stage. The City's industrial landscape is diverse, hosting multinational corporations such as Volvo and SKF, alongside small businesses and specialized clusters across 50 sectors. This economic variety is matched by a rich cultural and educational scene, with two universities and a significant student population fuelling innovation and creativity.

 

Gothenburg's commitment to sustainability is evident in its efforts to transform into a green urban area, redeveloping former industrial zones into new districts and improving infrastructure to encourage public transport and cycling. With a long-standing tradition of innovation, Gothenburg fosters collaboration within the community and supports robust innovation systems in the region. Since 2013, the City has been host to one of Sweden's six designated Innovation Platforms, and it is also home to several test beds for innovation in technology as well as innovations in services and social collaboration, in both simulated and real environments. The Gothenburg region is gaining an extensive part of national R&I funding and in 2018, the City was a finalist for the European Capital of Innovation (ICapital) award.

 

Gothenburg's proactive stance on climate and environmental issues is deeply ingrained. The adoption of its first climate program in 2014 outlined a comprehensive strategy spanning education, community planning, energy, transport, and consumption. Large-scale infrastructure projects like 'The West Link' underscore the City's commitment to sustainable mobility. By reporting its greenhouse gas inventory to the Covenant of Mayors and aligning with the EU's climate goals, Gothenburg demonstrates its dedication to reducing emissions and contributing to the vision of a climate-neutral continent by 2050

Key Learnings

District heating as key enabler for climate neutrality in Gothenburg - Covenant of Mayors Europe

The Gothenburg municipal power company has built an accumulator tank for short-term heat storage and optimising energy supply and demand while reducing the city district heating network’s fossil fuel dependency. Link https://eu-mayors.ec.europa.eu/en/node/347 

Gothenburg Green Bonds : Sweden

In 2013, the City of Gothenburg became the first city in the world to issue green bonds, which enable it to borrow money for investments that benefit the environment. More than 75% of proceeds from green bonds issued between 2013 and 2015 are used by the city to fund climate change projects that promote the transition to low-carbon and climate-resilient growth. Direct link: https://unfccc.int/climate-action/momentum-for-change/financing-for-climate-friendly/gothenburg-green-bonds

Operating lease finance

Instrument Overview Operating lease finance allows cities to access assets—such as electric buses, smart meters, or solar systems—without purchasing them. Instead, a private party owns and maintains the asset, and the city pays regular lease fees for its use. This model enables rapid deployment of climate-friendly infrastructure while keeping public balance sheets free from long-term debt obligations (CCFLA).   Why It Matters for Cities Minimizes upfront capital requirements Accelerates deployment of sustainable assets Keeps liabilities off municipal balance sheets Enables public-private collaboration in asset provisioning   Key Features Lease durations of 5–15 years Ownership and maintenance handled by the lessor Lease payments recorded as operating expenses Flexibility to upgrade or return assets at lease-end   How It Works City identifies asset need aligned with climate goals Lessor acquires and owns the asset, performs maintenance City signs a lease agreement and pays periodic fees Asset is in service under city control during lease term At lease-end, city may return, renew, or acquire the asset   Benefits & Challenges for Cities Benefits: Frees up capital for other priorities Avoids long-term financial risk Supports adoption of innovative climate assets Challenges: Total cost may exceed purchase price over time Limited flexibility around asset modifications Dependence on lessor performance and contracts   Use Cases Electric Bus Leasing in Gothenburg, Sweden The city of Gothenburg, Sweden, has taken significant strides toward sustainable urban mobility through the deployment of electric buses using an operating lease finance model. As part of the broader ElectriCity initiative, launched in 2015, the city introduced a fully electric bus line—Route 55—powered entirely by renewable energy. Rather than purchasing the electric buses and infrastructure outright, Gothenburg, through its regional public transport authority Västtrafik, entered into an operating lease agreement with Volvo Buses. Under this model, Volvo retained ownership of the buses and associated infrastructure, while the city paid periodic lease fees to access and operate the vehicles for public transportation services. This leasing arrangement enabled Gothenburg to reduce the financial burden of upfront capital investment and transferred much of the technology risk—such as maintenance and upgrades—onto the private sector provider. The partnership also benefitted from EU innovation funding through the Horizon 2020 program, which supported the city’s goal to develop, test, and scale clean mobility solutions. Implementation of the operating lease required close collaboration between public officials, the private sector, and research institutions. It also involved adapting urban infrastructure for charging systems and training personnel to operate and maintain the new electric buses. Despite some early challenges—such as aligning expectations among diverse stakeholders and integrating new infrastructure into existing transport systems—the project was a success. It led to an estimated 80% reduction in CO₂ emissions compared to conventional diesel buses and delivered noticeable improvements in air quality and noise levels along city routes. The initiative demonstrated how operating lease models can accelerate the adoption of clean technology by lowering financial barriers and minimizing operational risks for cities.   When to Use It Best suited in the Planning and early operation phase of the project It can be used for the Transport, street lighting, public buildings and energy efficiency sectors   Reference Links Cities Climate Finance Leadership Alliance (CCFLA) https://citiesclimatefinance.org/financial-instruments/instruments/land_or_infrastructure_leasing https://www.energy.gov/eere/slsc/financing-energy-efficient-public-infrastructure ElectriCity Gothenburg: https://www.electricitygoteborg.se/en/public-transport-tests-sustainable-and-attractive-city-transports ElectriCity Gothenburg: https://www.electricitygoteborg.se/en/news/volvo-launches-noiseless-electric-buses-gothenburg ElectriCity Gothenburg: Presentation https://smartcitiesireland.org/wp-content/uploads/2019/07/SmartIntelligentMobility_ElectriCityGothenburg_PeterLindgren.pdf Volvo: https://www.volvobuses.com/en/news-stories/press-releases/2016/jun/successful-year-for-gothenburgs-electric-bus-service.html Volvo: https://www.volvobuses.com/en/news-stories/press-releases/2017/jun/electricity-readying-for-the-next-phase.html   Back to Finance Resource
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Latest updates from the city

Pilot project spotlight

Gothenburg's Pilot Activity: FastForward Green City Zone
Background In Gothenburg, the transport sector accounts for the second largest share of greenhouse gas emissions. Addressing these emissions is of key importance for the city to reach its climate neutrality goals. The City’s ambition is to reduce the climate impact
Read more
Read Gothenburg Climate City Contract

External projects

City involvement in related European initiatives