Year 2019 in figures: MuniFin’s annual report and green bonds impact report for 2019 are published

MuniFin published its annual report 2019 On 4 March 2020. Responsibility report, which was previously published as a separate report, is now included in the annual report. At the same time, the company also published its green bonds impact report for 2019.

Watch the video below to see how MuniFin’s President and CEO Esa Kallio and the Head of Customer Finance Aku Dunderfelt sum up the year 2019.

New initiatives in sustainable finance

MuniFin has offered green finance for its customers since 2016. With the help of green finance the company wants to accelerate new projects supporting climate goals in Finland. By the end of 2019, 101 projects all over the country had been granted green finance and the amount of green finance disbursed totalled EUR 1.263 billion. In addition to environmental benefits, green finance enable also various social and economic impacts both locally and regionally.

– MuniFin green finance has steadily grown over four years to nearly EUR 1.5 billion. While there is no doubt that this is a significant amount, it is still too little. More trailblazers are needed to show others the way and to make the benefits of environmental investments more visible. The existing culture must be shaken across all sectors and in every investment decision, and transformed into a more environmentally sustainable model, says Rami Erkkilä, who is responsible for green finance product development at MuniFin.

In February 2020, MuniFin published its Social Bond Framework and launched social finance in the market. Social finance is targeted at investments in non-profit housing promoting equality and sense of community, as well as investments in wellbeing and education.

MuniFin annual report 2019 >

MuniFin Green bonds impact report 2019 >

MuniFin social bonds >

Further information:

Soili Helminen, Manager, Communications and Corporate Social Responsibility, tel. +358 400 204 853

Eeva Toivonen, ESG Analyst, tel. +358 50 464 3073

Nordic issuers release 2020 update to their green bonds impact reporting guide

The Position Paper on Green Bonds Impact Reporting, originally launched in October 2017 by a group of ten Nordic public sector issuers, has been published in an updated version. The new version replaces the January 2019 version.  

– We find great value in working together. Advancing impact reporting practices remains a priority for all of us, says Björn Bergstrand, Head of Sustainability at Sweden’s Kommuninvest and coordinator of the Nordic cooperation.

With the EU Sustainable Finance Action Plan and the EU Green Bond Standard (EU GBS) soon to become a reality, the Nordic issuers are anticipating even stronger interest for a harmonised approach to green bonds impact reporting going forward. The group aims to contribute to the development of a methodology in this field.

– While the EU GBS and the Taxonomy are not yet in full force, certain recommendations have been added to accommodate the suggested requirements, says Björn Bergstrand.

This includes recommendations on providing both allocation and impact reporting, to distinguish between financing and refinancing, and to report a breakdown of projects by the nature of what is being financed. In addition, the Position Paper’s existing mapping to the SDGs has been expanded to incorporate also the EU Environmental Objectives. 

The updated recommendations will see the Nordic issuers report less CO2 impact, in relative terms, from many of their financed green investments. This is because the baseline emission factor for electricity has been revised downwards, from 380 g CO2e/kWh to 315 g CO2e/kWh, to echo updated grid factors from the International Energy Agency (IEA) and the International Financial Institutions (IFIs), including the European Investment Bank (EIB) and the Nordic Investment Bank (NIB).

Torunn Brånå, Head of Green Finance at Norway’s Kommunalbanken and chairperson of the cooperation’s technical/environmental working group, says the emission factor for electricity is a key assumption when calculating the environmental impact of the projects financed.

– Deciding on a joint approach for estimating the impact of electricity used, reduced or produced has been one of the important tasks of this group. Now, for the first time, the emission factor has been updated to reflect mainly a more ambitious expected decarbonisation of the European energy grids.

Torunn Brånå says revising the grid factor to result in less reported CO2 impact is good news.

– This means the development of our energy systems are going in the right direction. The revision will lower the positive impact of energy efficiency projects and renewable energy production, whilst reducing the negative impact of an increased use of electricity, be it for electrical bus fleets or the operation of a project.

Although developed with the primary aim of assisting Nordic public sector borrowers in reporting the environmental impact from their investments, signatories also hope that the Position Paper will prove useful for issuers from the private sector, issuers from other countries as well as for the investor community.

– Resolving climate issues is at the heart of government agendas and policy papers all over the world, with various actors increasingly being expected to demonstrate their impact and climate actions. The financial industry has a key role in the transition, not least in providing robust and credible transparency to stakeholders, says Eeva Toivonen, ESG Analyst at MuniFin and the Finnish spokesperson for the Nordic cooperation.

The Position Paper has been developed by a group comprising public sector green bond issuers from the four Nordic countries Denmark, Finland, Norway and Sweden. They include the local government funding agencies Kommunalbanken (Norway), Kommuninvest (Sweden) and MuniFin (Finland); the Swedish Export Credit Corporation (SEK); and seven Swedish municipal or regional issuers including City of Gothenburg, the municipalities of Lund, Norrköping, Västerås and Örebro, Region Skåne and Region Stockholm.

The issuers’ work is supported by SEB and Crédit Agricole CIB, with input from CICERO Shades of Green, the Nordic Investment Bank, as well as several investors.


About the Nordic Position Paper on Green Bonds Impact Reporting

The Nordic Position Paper proposes an outline for reporting environmental benefits of green bond investments. It also provides guidance on general matters such as to distinguish between reduced and avoided emissions, as well as to report impact in relation to disbursed green bond allocations.

Moreover, the Paper provides suggestions for metrics and indicators relevant to eight different project categories. The effort builds upon reporting approaches suggested by the Green Bond Principles and multilateral development banks, as outlined in the GBP Handbook – Harmonized Framework for Impact Reporting.

The Paper is used as the reference framework for emerging impact reporting platforms such as the Green Assets Wallet and the Nasdaq Sustainable Bond Network Platform. It is also referenced in the proposal for an EU Green Bonds Standard, published by the EU Commission’s Technical Expert Group on Sustainable Finance.

The Paper is available for download from the signatories’ web pages such as munifin.fi, kbn.com, kommuninvest.se and also from the ICMA Resource Centre for Green, Social and Sustainability Bonds, icmagroup.org.


Contact information

MuniFin
Eeva Toivonen, ESG Analyst, +358 504 643 073, email: eeva.toivonen@munifin.fi

Secretariat for the Position Paper and main contact for questions & comments
Kommuninvest
Björn Bergstrand, Head of Sustainability, +46 708 86 94 76, e-mail: bjorn.bergstrand@kommuninvest.se

Chairperson of the Nordic issuers technical/environmental working group
Kommunalbanken
Torunn Brånå, Head of Green Finance, +47 911 58 528, e-mail: tob@kbn.com


MuniFin publishes the first Nordic SSA social bonds framework and launches a new social finance product

With this launch, MuniFin continues to be the forerunner in offering sustainable finance products in Finland and in the Nordics.

MuniFin’s Social Bonds Framework is aligned with the Social Bond Principles published by ICMA and ISS ESG has provided a second opinion of the framework.

Social finance project selection is based on MuniFin’s Social Bonds Framework and final approval is made by the Social Evaluation Team. The team consists of two independent experts and one MuniFin representative.

Financing Finland’s welfare state

MuniFin is the largest provider of financing to municipalities and the social housing sector in Finland. Municipalities play a key role in maintaining Finland’s welfare state, as they are responsible for the majority of service production, including education and healthcare. Social housing organisations on the other hand ensure that affordable housing is available. They also aim to tackle social issues like homelessness and social exclusion.

The eligible project categories that have been selected for MuniFin’s Social Bonds Framework are in the core of MuniFin’s customer finance business. Eligible project categories under the Use of Proceeds include housing, welfare and education.

The projects have to meet additional criteria in order to be eligible for the Social Finance product. In the selection process, special emphasis is placed on targeting the most vulnerable parts of the population and areas where investments by the municipalities will likely have the greatest impact on the area’s vitality.

Social financing funded by social bonds

MuniFin plans to issue an inaugural benchmark sized Social Bond in the second half of 2020 and intends to make it an integral part of the annual funding program going forward. MuniFin’s themed bond issuances, consisting of green and social bonds, will account for roughly 10–15% of new funding annually.

– Corporate responsibility is in the very DNA of MuniFin. We strive to be in the forefront in the responsibility of our products and services, processes and operations. It seemed only natural to take this new step in broadening our sustainable product offering, says Joakim Holmström, the Head of Capital Markets at MuniFin.

MuniFin was the first credit institution in Finland to launch green finance for environmental investments in 2016. In the same year, the agency also issued Finland’s inaugural green bond.

Read more about MuniFin Social Bonds:

Information on social bonds, MuniFin Social Bonds Framework and a ISS ESG’s second party opinion on the framework are available at our Social Bonds site >

Further information:

Joakim Holmström, Head of Capital Markets
tel. +358 50 444 3638

Soili Helminen, Manager, Communications and CSR
tel. +358 400 204 853

Behind the scenes: a young entrepreneur Eerika shadowed MuniFin’s CEO Esa Kallio for a day

What was on today’s agenda?

“We had several meetings with people trying to sell something to Esa. MuniFin’s team in the negotiations always consisted of Esa and one other person, depending on the topic. We also attended a board meeting of MuniFin’s subsidiary Inspira, which focused on the company’s strategy and next year’s action plan”, Eerika says.

“I have had such an exciting day. MuniFin works with really important issues. I was expecting the place to be boring – and quiet. A lot of the staff are older, but they have young minds. The organisation clearly wants to stay competitive. The finance industry intrigues me because I like numbers. The experience has left me feeling that I want to learn more about this business.”

“It is extremely refreshing to talk to someone young and see your own work through someone else’s eyes”, Esa says.

Eerika wants Esa’s advice on which career path to follow in the future.

“You have a natural curiosity, and you are clearly adventurous. I think you would enjoy a job that involves interacting with people. You have a healthy self-esteem, and you are not afraid to put yourself on the line and always reach for the next step up the ladder”, Esa says.

A thriving café business back home

Eerika runs a live music café called Kukkakievari in Varkaus, which she renovated with her sisters.

Eerika and her 16-year-old sister Eliina run a live music café called Kukkakievari in Varkaus, which also employs their younger sister Meeri.

How did you come up with the idea of opening a café?

“Owning a live music restaurant has been my dream for a long time. I have been taking piano lessons for 11 years, and my sisters and I also perform in the café.”

However, it was Eerika’s neighbours who actually got the ball rolling. They wanted to do something useful with an empty outbuilding that they had on their property and suggested that Eerika and her sisters open a business there.

“I spent almost nine months in North America last year, because I wanted to get better at English. I was in Canada when my mother called me and asked whether I would like to run a café in the neighbours’ outbuilding with my sisters. We get on well with our neighbours, and they knew that we would probably like the idea.”

So how is business?

“Business is great. You can earn up to EUR 10,000 in the JA Company Programme, and we reached that limit after just three weeks. It was at that point that I decided to register as a sole trader.”

Eerika and her sisters advertised their business through the media.

“I tipped off our regional and local newspapers, and four of them sent reporters over to write an article about us. When they realised what it was that we were doing, they were fascinated. Facebook and Instagram have also been important in spreading the word.” 

Heart set on entrepreneurship and management

“Eliina and I are both back at school now and taking a break from the café. We do not want our customers to forget about us, which is why we are thinking about hosting a Christmas event of some kind, maybe a concert. Our plan is to reopen the café again properly in the spring and work first at weekends and then every day except Mondays for the summer holidays”, Eerika says.

Despite the undeniable success of their concept, Eerika and her sisters have their sights set on bigger and better things. They want to either expand the café or turn it into a catering business or a B&B.

“I have a meeting with a local restaurateur next week, whose advice and experience I hope will help me. I used to think that I did not know enough, but participating in the JA Company Programme has made me realise that you can always ask for help”, Eerika says.

Eerika and her sisters found out about the JA Company Programme through their local Enterprise Agency. The programme has taught them a lot about business planning and bureaucracy in particular. It has also given them many new opportunities, such as Eerika’s chance to take part in the Job Shadow campaign.

“I want to work in management, which is why I intend to go to university. I am currently leaning towards studying economics, because it is such a versatile subject. I like working with people. One day, I would like to be a human resources manager.”

MuniFin and JA Finland in a close partnership

“Eerika is an outspoken and enterprising young woman. If just 15% of Finnish teenagers were like her, our future and competitiveness would be guaranteed”, Esa Kallio says.

Encouraging entrepreneurship and preventing social exclusion among young people are crucial for the future success of Finland’s local authorities. This is why promoting education, familiarising young people with economics and politics early on and fostering entrepreneurial attitudes are at the heart of MuniFin’s corporate citizenship policy.

MuniFin is one of JA Finland’s main partners in 2019 and 2020. Schools can incorporate the JA Company Programme into their lesson plans to give their students knowledge and skills in financial literacy, work readiness and entrepreneurship. MuniFin will also have its own Signature Award category in JA Finland’s 2020 national entrepreneurship competition next spring.

In addition to the partnership with JA Finland, MuniFin is involved in Economy and Youth TAT’s entrepreneurship village project. The project is designed to give schoolchildren in the final year of primary school their first taste of the labour market, economics and political decision-making.

Text and photos: Soili Helminen

A Call for Mayors: Finnish cities are inviting their global counterparts to take climate action

In these videos the mayors Jan Vapaavuori of Helsinki, Pekka Timonen of Lahti and Marita Toikka of Kouvola describe the climate actions their cities are taking to fight climate change. They aim to encourage cities worldwide to take practical steps towards low carbon society – each step is important, and it is crucial that every city starts taking them right now.

The videos coincide with Finland’s Presidency of the Council of the EU in the latter half of 2019 and the UN Climate Action Summit in New York City.

MuniFin joins Climate Bonds Initiative Partners Program

MuniFin launched green financing for environmental investments in 2016 and issued its first green bond the same year. Since then the company has issued two more publicly traded green bonds and arranged one green private placement. The green project portfolio has reached over EUR 1.2 billion.

MuniFin has taken an active role in promoting more ambitious climate action among its customers. The company offers a margin discount for green projects, which is still globally a rare feature among green financing products.

“We need to dramatically scale up investments to counter climate change, at a global, regional, national and community level. MuniFin acts as a cost-efficient vehicle to channel global funds into Finland’s climate transition, playing a key role in the financing of climate mitigation and adaption projects in municipalities”, says Manuel Adamini, Head of Investor Engagement at Climate Bonds Initiative.

“Raising awareness of the need of green investments and helping our customers to find working examples of realised green investments is one of our aims. We believe that Climate Bonds Initiative will significantly help us reaching this goal”, says Esa Kallio, President and CEO of MuniFin.   

Climate Bonds Initiative undertakes advocacy and outreach to inform and stimulate the market, provides policy models and government advice, market data and analysis, and administers an international Standard & Certification Scheme for best practice in green bonds issuance.

“The Climate Bonds Initiative is delighted to join forces with MuniFin, a green bonds pioneer, to further strengthen climate action in Finland”, Mr. Adamini says.

Banks, institutional investors, private and non-governmental organizations (NGOs) and governments are eligible to join as Climate Bond Partners to help grow a market of green and climate bonds. Partners support investor and stakeholder outreach and education projects centred on growing robust and­­­ sustainable green bond markets that contribute to climate action and low carbon investment. Partners assist in developing initiatives to grow investment in climate finance solutions, participate in different market development committees & help define policy agendas for sector, country & sub-national green bond development programs. A list of Partners is available here.

A school, library, music institute and adult education centre – the new Tohmajärvi Centre of Education offers it all

A municipality of 4,500 inhabitants, Tohmajärvi has recently begun the largest project in its history. From the beginning of 2021, the Tohmajärvi Centre of Education will offer schooling from preschool to general upper secondary school and leisure activities in its library, music institute and adult education centre.

Located close to the Russian border between Kitee and Joensuu, Tohmajärvi has started the largest project in its history this spring: the building complex under construction in the centre of Tohmajärvi will bring all the municipality’s educational services under one roof.

When complete, the Centre of Education will have close to 5,500 square metres of floor space and is designed to meet the needs of 350 students. The idea of combining cultural and educational services arose from a problem that, sadly, many municipalities are familiar with: its school buildings, which were built in the 60s and 70s, are reaching the end of their useful life.

“We knew that decisions about renovating the current school centre would have to be made within the next five years. We decided to deal with the problems at one stroke,” says Tohmajärvi municipality’s Director of Finance and Administration Vesa Karhapää.

The colossal contract is implemented with flexible real-estate leasing

At a cost of more than EUR 11 million, the contract is a huge project for a municipality the size of Tohmajärvi. The size of the project set its own challenges: financing the new Centre of Education with a traditional balance sheet loan would have exerted a considerable burden on the municipality’s self-sufficiency. That is why alternative solutions were sought from the outset.

“To our surprise, only one commercial bank was able to provide real-estate leasing as a financial solution for the project. The solution offered by Municipality Finance was so much more affordable that there was no question of acquiring funding from anywhere else,” says Karhapää.

Mika Korhonen, the Account Manager at MuniFin responsible for the project, says that flexible real-estate leasing is growing more and more popular year by year.

“We have been offering real-estate leasing for seven years, and there is no end in sight to its growing demand. This form of funding is particularly popular in small and medium-sized municipalities. The building of a school is a typical real-estate leasing project,” says Korhonen.

According to Korhonen, the contract period for real-estate leasing is adapted as far as possible to the buildings’ depreciation periods in the municipality. A typical lease period is 20 years, after which the municipality can either redeem the building at a price equivalent to its actual residual value, continue the leasing contract or resell the building.

The right partner can bring savings of millions

On the basis of the preliminary financing negotiations, it was clear that the project would exceed the EU-wide public procurement threshold set by the European Commission. This meant additional requirements for the project that, due to its size alone, would stretch the capabilities of the small municipality to the utmost.

To support the tendering process, MuniFin offered the municipality the services of its subsidiary Inspira. Inspira’s team of ten specialises in planning and implementing municipal and city investment projects and restructuring arrangements.

According to Ville Riihinen, the Inspira Director in charge of the project, utilising an expert partner can save a municipality a lot of money.

“In all our projects, we take advantage of the know-how we have gained over the years and our existing network of experts. At this very moment, we are running six major tendering processes for investment projects, involving more than ten buildings and totalling more than EUR 100 million in investment costs. Small municipalities, in particular, simply don’t have the experience for dealing with such processes. In major projects, choosing the right expert partner can save the municipality millions,” Riihinen sums up.

Partnering with Inspira in the Tohmajärvi contract are Ramboll, which is as an expert on technical matters, and the law firm Krogerus, an expert on legal matters.

“The partnerships were an excellent suggestion by Inspira. All three have such extensive experience in their own specialisms that they were able to provide us with ready-made templates for best practices and advice on what pitfalls to watch out for. Without such skilled partners we would have been in deep trouble,” Karhapää smiles.

The tendering process for the project was carried out through the negotiated procedure. During the eight-month process, various construction companies worked on their own plans in accordance with the guidelines and planning guidance provided by the municipality. Various user groups participated in the design of the Centre of Education, such as teachers, students and real estate maintenance providers.

The new Centre of Education is an investment in the future

In terms of paperwork, the colossal project is coming to an end, but the construction is only just beginning. In May, the work to cast the foundations of the centre began along the stretch of road named after the most famous daughter of Tohmajärvi, the singer Katri Helena.

For a municipality grappling with an ageing population, migration losses and an unbalanced employment structure, the Centre of Education is much more than the sum of its parts. The project is an integral part of a more vibrant Tohmajärvi than ever – and a major investment in its future.

“We hope that the Centre of Education will increase Tohmajärvi’s attractiveness, especially for families with young children. Our goal is to make Tohmajärvi a better home than ever – a place where everyone has the best possible conditions for living a rich, varied life,” Karhapää says.

Text: Roope Huotari

Master Class was an interdisciplinary feast – “Everyone builds their own life story”

It offered an interdisciplinary, dialogic approach, pragmatic problem solving and the genuine opportunity to have an influence. These are the issues that are repeated, even after the course has come to an end in March, in the speeches of the winning team of the challenge-based Hyvä (yhteis)kunta Master Class, organised by Municipality Finance and the University of Helsinki.

One of the members of the winning team is a student of political history, Kaarina Tuokko, who wanted to attend the course to test her skills through concrete themes.

“I applied to the course to prove to myself that I am actually able to make use of the things I have learned in practice, and not rely purely on theory,” Tuokko says.

The teams of about four students who participated in the course developed their own concrete solutions to the real challenges Finnish municipalities and cities are facing. The solutions addressed community spirit, interaction, the importance of physical activity, inclusion, functional services for the elderly, the utilisation of data and the diversity of digital material.

“The challenges of the course were diverse and genuinely identifiable problems in our society, which made the whole programme particularly fascinating. The most rewarding moments were those where we found solutions and felt that we were achieving something tangible. There should be more of this kind of teaching,” Tuokko continues.

The other members of the team, Ilona Mikkonen, Susanne Valta and Mia Åström, agree.

Mikkonen is a doctor specialising in psychiatry and explains that this work allowed her to see what inequality in society can do to people. She immediately felt that the themes of the course were important and interesting.

“We made a truly interesting group with people from different disciplines. We immediately found some synergies and good dynamics. The topics are far-reaching social issues, and there is no unambiguous answer to them. I personally think that everyone builds their own life story and takes on the role of an active participant, instead of it being given to them ready-made by external forces,” Mikkonen explains.

Social problem solving comes first

A student of general and adult education, Susanne Valta says she is particularly interested in the challenges of sustainable development and the rational use of resources in a welfare state, which is why the notification of the course beginning immediately piqued her interest.

“The whole programme sounded fascinating because of these things, and it really was. I think I will be working on similar challenges later on in my career,” Valta says.

A master’s student of social and public policy, Mia Åström found that the strong interdisciplinary approach of the course brought not only information from the perspective of other disciplines to solving the problem, but also a confidence in her own skills.

“The Master Class differed from other courses due to its special, defined process. Each time we met, we had to ponder a different phase of the task and make progress with it by writing about it. I also made friends with the amazing women in my team. Without this course, I wouldn’t have come across them or their disciplines during my studies,” says Åström.

The winning piece of work

The multidisciplinary winning team ‘Hyvinvoinnin asialla’ (‘Promoting Well-being’) developed a model that makes it possible to measure the effectiveness of an investment to people’s well-being. The team focused particularly on the social exclusion of young people and its prevention. Their solution is based on the tree of meaningful agency, which draws on various theories about the welfare impacts of investments. The Jury was impressed with the team’s excellent collaboration across various disciplines.

What is a Master Class? This spring, the University of Helsinki and Municipality Finance organised collaboratively a challenge-based Master Class programme with the theme of sustainable well-being in the municipalities and cities of the future. The programme was specifically geared towards master-level students and young researchers or professionals interested in the sustainability of the future welfare state, urban development issues and social effectiveness. The course consisted of three months of facilitated teamwork, during which multidisciplinary teams, supported by mentors, developed their own concrete solutions to one of three challenges, while utilising the design thinking methodology and co-creation tools.
Source: University of Helsinki

Text and photos: Pihla Hakala

Municipality Finance CEOs meet each other in Yrityskylä for schoolchildren – “We need more of these”

On this sunny Friday morning, the facilities of the Museum of Technology in Vanhakaupunki, Helsinki are filled with the buzz of conversation, laughter and excitement when dozens of 12-year-olds from various schools around the city gather together. After a while, the hum of voices dies down and the schoolchildren divide into small teams. The long-awaited working day in the Yrityskylä business village is about to start.

Yrityskylä is a society specifically for schoolchildren, reminiscent of a miniature town, where pupils have the opportunity to work in their chosen profession and role, and also to get paid for the work they do. Many socially significant brands and their miniature companies are represented in the museum’s premises, including Nordea, ABB, Helen,  Lidl, OP, Terveystalo, the K and S Groups, Martela, Fortum and UPM Kymmene. Walking along the corridor, you come to the Municipality Finance office, where a team of four are gradually starting their working day.

The President and CEO of the miniature MuniFin, 12-year-old Mona from Käpylä school, is carefully preparing for the tasks of the day, consisting of evaluations of customers’ investment projects and shared meetings and reviews. She gets through her tasks using a tablet – the entire learning environment is digital and gamified. Mona’s team includes Responsibility Manager Aslak, Account Manager Aleksi and Financing Manager Emil.

In Yrityskylä, the students act as employees, citizens and consumers and, after being paid, take responsibility also for their spending. On site, it is clear to see that each team is highly motivated and takes care to acquaint themselves with the tasks assigned to them.

“This is a tangible way to teach children skills they will be able to use in the future. More attention should be paid especially to financial skills right from the first few years of school,” says Tiina Solas, Partnership Manager at Yrityskylä.

Following the curriculum

This is a special day, especially for the young MuniFin employees, because today Mona will meet her colleague, the President and CEO of Municipality Finance, Esa Kallio, who will be visiting Yrityskylä.

“Yrityskylä is a brilliant idea. These are exactly the kinds of projects we need more of in today’s society, rather than cuts in education. Practical action is an important route to learning,” says Kallio.

Mona is a CEO with plenty of initiative and is happy to tell Kallio about her day. This meeting does not make the young leader nervous.

“I’ve had a lot of fun in the Yrityskylä and there have been no boring moments at all. Some things are quite difficult but not impossible, and you learn a lot from the tasks,” Mona says.

The work performed by Yrityskylä is nationally significant.

“In 2019, we are already reaching 75% of Finland’s sixth graders and 40% of ninth graders from nearly 200 municipalities. There are more than 100 partners involved,” Tiina Solas explains.

Piloted by Economy and youth TAT, Yrityskylä is a Finnish learning complex that has been recognised as the best educational innovation in the world. It is designed to provide sixth and ninth graders with positive experiences of the economy, working life and society. The entire operation is based on the curriculum of the Finnish National Agency for Education. Read more at: yrityskyla.fi

Text: Pihla Hakala
Photos: Jari Kinnunen

Turku T3 – The hospital concept for a new kind of thinking to be completed in 2021

“Able withstand a train crash,” reported the public service broadcasting company Yle in June 2018. Eighteen months earlier, the tone of reporting had been quite different: errors had been discovered in the foundations and vertical structures of the hospital’s concrete deck which was designed to cross over the railway and motorway running from Helsinki to Turku. The concrete was too brittle, and its strength was not estimated to withstand the strain caused by a potential collision. Demolition and repair work was started immediately, but already almost 3,000 cubic metres of concrete of deficient strength had been set in place. This caused a substantial delay in the construction work.

“The dismantling and rebuilding of the structures already made will delay the completion by about ten months. The contractor is responsible for the costs of dismantling and rebuilding, but the delay will also cause significant expenses for the Hospital District. This is distressing, of course, but fortunately we were able to negotiate the costs and organise flexible funding,” said Project Director Timo Seppälä at the time.

Happily today there are good news about the construction site. The new concrete deck is strong enough and set in place, and the new hospital will be completed in the autumn of 2021. The new building will house some key functions of the dilapidated U Hospital, which was built in the 1960s. These functions include the treatment of children and adolescents; childbirth and gynaecology; ear, nose and throat, and medical support services, such as clinical neurophysiology and medical imaging.

Flexible financing with real-estate leasing

The original project design for the new T3 building was approved in 2014. This large-scale project involves numerous partners. The project belongs to the Hospital District of Southwest Finland and is located on land owned by the City of Turku, while underneath the new hospital the railway lines and the Turku-Helsinki motorway serve travellers.

Three years ago, MuniFin joined the project as its financier. The T3 hospital is an extraordinary project not only because of its architecture, but also its funding. The Hospital District decided to finance it with flexible real-estate leasing.  

“In the economy stabilisation programme launched in 2012, we committed ourselves to a maximum loan portfolio of MEUR 200 in our Hospital District. Due to our large investment programme, our debt-to-equity-ratio was already quite high. We wanted to reduce the price risk associated with refinancing, while keeping the financial model easily comparable to our own balance sheet financing. It was absolutely necessary to start the T3 hospital project, and that is why we chose the flexible real-estate leasing offered by Municipality Finance,” says Leena Setälä, the Hospital District’s Director of Strategy.

The T3 project is MuniFin’s first hospital project implemented with real-estate leasing.

Real-estate leasing is a flexible alternative to conventional balance sheet loans. With financial leasing, the costs are divided over a long period of time, without the investment burdening the balance sheet, as it does when using a balance sheet loan.

“In practice, we act as the financier and owner of the T3 Hospital. The Hospital District has selected the contractor responsible for the construction through competitive tendering and will lease the building from us with a leasing contract after its completion,” Department Director Kirsi Räbinä from MuniFin explains.

In a long-term construction project such as the T3 hospital, funding needs to be carefully considered from the point of view of its long-term effects. The newly updated price tag of the eight-storey new construction with a total area of about 55,000 square meters is approximately MEUR 190.

In the project plan, the project’s costs have been estimated according to the 2014 Tender Price Index. However, the cost level of construction at that time was completely different to what it will be in 2021, which is the time frame for the construction and financing of the T3 hospital. Due to the faster than anticipated rise of construction costs and the prolonged completion schedule resulting from the problem with the concrete, the project funding had to be reviewed, and a budget negotiation was held in the summer of 2017.

“We went through the costs of the project, the development of building cost indexes in the coming years and factors that had caused additional costs, such as the concrete problem. The flexible renegotiation of financing was a win in a difficult situation,” Setälä says.

The missing piece completes the whole

The Finnish hospital stock is at a stage where new constructional solutions are needed. New technical possibilities and needs require precise planning and some skill at predicting the future.

“The hospital must stand the test of time and be able to serve not only the current but also future needs of health care. Demographic factors, future illnesses and the functioning of the premises have been taken into account in the planning,” Setälä says.

The ambitious and impressive location of the new T3 hospital is more than the fruit of architectural passion. Located on top of high-speed transport connections, the hospital provides easy access from the outside, but also brings synergies within it. T3 forms a continuum with other parts of the hospital. The same courtyard houses Hospital A built in the 1930s and the facilities of the University of Turku’s Faculty of Medicine, also known as Medisiina D. The future campus area will enable, among others, close cooperation between teaching and research and sharing the facilities between students and the hospital.

“Whereas in the past the railway and motorway split the hospital area apart and separated the units, they now combine them into a functional whole,” explains Riikka Aaltonen, Project Director of Functional Design.

The starting point for the design were the synergies between the various functionalities.

“We are seeking operational reforms that will reduce, for example, the unnecessary movement of goods and people. The new connection will allow the operating theatres, among others, to function in the same building as one operating unit. This will benefit both patients and the staff,” Aaltonen continues. 

Unification is an important point not only for functionality but also from the point of view of symbolism: T3 is the missing piece of the hospital area.

What does a hospital for a new kind of thinking look like?

There are three principles guiding the design of the hospital complex: the building must be healthy, safe and functional. In addition to this, the architects wanted to challenge people’s ideas of what a hospital looks and feels like. The objective was to create a hospital that is also visually beautiful and welcoming.

Architect Mikko Sinervo from the Architect Group Reino Koivula is in charge of the visual appearance of the hospital. The starting point of the design was the story that Sinervo created together with Matti Tainio, who is responsible for the acquisition of art within the hospital project.

This story is based on a typical Finnish archipelago landscape, where the hospital represents an island and the busy motorway underneath represents flowing water. The engine room to be built on the roof of the hospital acts as a lighthouse that illuminates the surrounding landscape.

The story continues indoors and incorporates the animals of the island. The emblematic animals have a two-fold function: they give people something pleasant to think about and act as signposts. The building has two large light-filled foyers that are made from glass from floor to ceiling.

“Why does a hospital have to look like a hospital? T3 is revolutionising and breaking boundaries. The new facilities will also make art and culture possible in this space, i.e. the very things that make a place feel comfortable for both the employees and patients,” Aaltonen sums up.

Text: Heidi Penttinen
Photo: Architect Group Reino Koivula & Schauman Arkkitehdit