Transcript: Interview with Danish Debt Management Head Henrik Nørby
8 September 2025
By Marta Vilar – MADRID (Econostream) – Following is the full transcript of the interview conducted by Econostream on 4 September 2025 with Henrik Nørby, Head of Monetary Policy Implementation and Government Debt at Danmarks Nationalbank.
Q: Mr Nørby, on 3 September you announced your new green bond framework, under which, starting in 2025, your green bonds will be issued as European Green Bonds (EuGBs). What motivated this?
A: The green bond framework has been aligned with the new EU green bond standard to support the continued development of the green capital market. We are also aligned with the ICMA green bond principles, so you can say we have chosen to be at the forefront of market standards. We also aim to set a benchmark for the green bond market. We strongly support the development and implementation of common standards to bring transparency and credibility into the green bond market.
Q: You have also expanded the use of proceeds to include sustainable land use projects like afforestation and rewetting soils. Why?
A: Sustainable land use projects have now been included. They are all essential for reaching the overarching climate goals for Denmark. We can say they are the core of Denmark's CO2 reduction goals, which are to reduce CO2 emissions by 70% by 2030, relative to 1990 levels.
Q: Do you see scope to expand the framework with new eligible categories in the future? Were there any areas that you considered in this framework that you ultimately didn't include?
A: There is an interministerial working group that will evaluate all the expenses on the Budget Act yearly. If they find something that could be eligible, that could be included. This time all eligible expenses are under the climate mitigation criteria, which is also at the core of our climate strategy. But as we go along, future potential new eligible expenses could be included.
Q: What determines how much of the eligible expenditure is allocated to renewables, transport and land use, respectively?
A: Approximately 50% is clean transportation, 40% is renewables and 10% is land use. Those allocation principles are set out in the fact sheet, but today there is a preference towards sustainable land use first, then energy, and then transportation.
Q: How has the twin bond model influenced liquidity in the market and investor participation?
A: Investors have generally welcomed twin bonds. Liquidity is supported by allowing investors to exchange green bonds for the equivalent and more liquid conventional bonds. This enhances liquidity despite having lower issuance volume in the green bond. So far nobody has used this feature yet due to pricing in the market.
Q: Have you explored alternative issuance models either alongside or instead of the twin bond model?
A: No, we have not. The twin bond concept has worked well for us and has been well received by the investors.
Q: The market is expecting a new 10-year green government bond in the second half of the year. What can investors expect in terms of the size and the timing of the issuance?
A: We plan to issue up to DKK10 billion this year. First, we will have a syndication within the next month and afterwards the new green bonds will be reopened in auctions. Our previous green bond syndications have been around DKK7 billion.
Q: Beyond the 10-year green bond, do you see potential for other maturities, for example, T-bills or even ultra long green bonds, in order to broaden the curve?
A: In our issuance strategy we said that we concentrate our issuances on the 2-year and 10-year point on the curve. The 10-year point is the most liquid. It will be most natural for us to issue green bonds at that 10-year point going forward too.
Q: And not the 2-year point?
A: That's not currently in scope. We have more investor demand for the 10-year point.
Q: Do you anticipate scaling up issuance volumes under the updated framework, given the broader pool of eligible expenditures, and how would you manage volumes if demand outpaces available projects?
A: This year we plan to issue DKK10 billion and have eligible expenditures for DKK18 billion. We currently don't have a strong issuance need, and it's unlikely that we will see any material changes to that. That’s why we think that DKK10 billion issuance is appropriate, we will have plenty of eligible expenses to cover that.
Q: Do you see scope for Denmark to pioneer other sustainable finance instruments at the sovereign level, such as sustainability-linked bonds, or will the focus remain on pure green bonds?
A: In the near future we will focus mainly on new green bonds. Denmark has a limited issuance need.
Q: You commit to allocation and impact reports aligned with the EuGB framework. How granular do you expect your impact reporting to be, especially for categories like land use, where metrics can be less standardized?
A: Today we already published allocation and impact reports under the old green bond framework, and we will keep doing that.
Q: What benefits do you expect from adopting the EuGB standard in terms of investor demand, pricing, and secondary market performance? Do you anticipate a noticeable greenium?
A: The Danish greenium has been pretty stable around 2-3bp for the existing two green bonds, which for us reflects a fairly strong investor demand. It’s hard to predict what kind of greenium we can achieve for the new EU green bond, but we believe it will be similar or could even have higher demand.
Q: In your view, how will the new framework influence overall investor appetite for Danish green bonds, and how does Denmark compare with other European sovereign issuers?
A: We expect that the new green bond, which is aligned with the European Green Bond standard, will get good attention and will broaden our investor base.
Q: What type of investors are you aiming to attract to your base? Are you expecting more international participation?
A: Our interest is to have a diversified, broad investor base. That's one of the key reasons why we launched a green bond [together with supporting the market for green bonds].
Q: Given your DKK-based funding strategy, could you see Denmark issuing green bonds in euros or other currencies to broaden the international investor base?
A: Denmark issue bonds in foreign currency as contingency funding for the FX reserve or the government. Currently we issue one foreign currency bond a year and that issuance helps to ensure that the government maintains strong access to foreign currency market. That has been a good strategy for many years.
Q: But you could eventually issue a green bond in another currency, right?
A: In general in Denmark we only cover Danish expenses in DKK with funding in DKK. So eligible green expenditures in DKK would be financed through issuances in DKK.
Q: Unless there is a very good opportunity in other currencies which leads you to do it.
A: We will only increase funding in foreign currencies if there's a strong need for liquidity or if there is a good reason to increase the size of the foreign exchange reserve.