Thursday, October 20, 2016

California Green Muni Bond Issuances Top $1 Billion in 2016

More Than Double 2015

California government agencies have issued over $1.1 billion in green bonds in 2016, more than double the amount issued in 2015.  This is part of a worldwide trend of rapidly accelerating use of green finance tools.

The most recent issuance from the Los Angeles County Sanitation District put California over the $1 billion mark for the first time.  The Sanitation District $170 million bond assists with recycled water and related projects.

California Green Muni Bond issuances since the State of California
Issued the first one in 2016

The Climate Bonds Initiative tracks green bonds worldwide and reports that, as of this writing, there have been over $60 billion in green bonds issued globally in 2016, including bonds for both public agencies and private entities.

Green bonds are used for infrastructure projects that contribute to environmental and climate goals.  These can range from green building to renewable energy to clean water and more.

California government agencies aren't alone in issuing green bonds.  California based Apple issued a $1.5 billion green bond as part of a larger offering in February (Reuters article here).   California PACE providers have also been issuing green bonds to assist their home and business energy and water retrofit programs.  California based Renovate America, for example, issued a $320 million green bond in late September (details here).

California leaders see the value of improving the green bond marketplace. “Greater use of green bonds could provide a secure and growing funding stream for governments and private industries to meet the challenge of curbing climate pollution,” said state Treasurer John Chiang in late 2015. “We want to see what we can do at the California State Treasurer’s Office to unlock the potential of the green bond market and create a bigger market for these investment tools.”