A Leader in Climate Finance, Connecticut Green Bank Enters the Green Bond Market

Solar Home Renewable Energy Credit Program Achieves Climate Bond Certification for $38 Million Issuance

Rocky Hill, CT (June 6, 2019) – The Connecticut Green Bank has issued green Asset-Backed Securities consisting of $36.8 million in Solar Home Renewable Energy Credits (SHREC) Collateralized Notes Series 2019-1 Class A and $1.8 million Series 2019-1 Notes, Class B. The financing is certified against the Climate Bonds Standard, providing investors with assurance of the deal’s green credentials. Verification against the Climate Bonds Standard was done by Kestrel Verifiers, a US-based company. Climate Action Reserve, a non-profit specializing in environmental impact assessment, provided an independent review of the beneficial impacts of the activities and programs financed with the securities. The Green Bank worked with RBC Capital Markets as their underwriter and sole book runner in this green bond transaction.

The proceeds from the monetization of the SHRECs are allocated to fund the Residential Solar Investment Program (RSIP), which was created to fulfill state policy adopted in 2015 that mandated the installation of 300 MW of new residential solar by 2022, while developing a local solar industry. The Green Bank is moving swiftly towards accomplishing this goal two years ahead of schedule. Through its ongoing evaluation efforts to measure positive societal impact, the Green Bank will be tracking job growth, tax revenue generation, air pollution reductions, public health improvements, and equitable access to clean energy as a result of increased investment in the deployment of clean energy.  

“In an effort to accelerate the growth of the market for residential solar PV in Connecticut, this transaction represents an approach that can scale-up public and private investment in our state’s growing green energy economy,” stated Bryan Garcia, President and CEO of the Connecticut Green Bank. “Such investment will not only reduce the burden of energy costs on our families, specifically low-to-moderate income families, but it will also create jobs in our communities and reduce the pollution that causes climate change.”

A Regional Leader and National Model

A regional leader in sustainability and climate finance, the Connecticut Green Bank was recognized as the 2017 Innovations in American Government Award winner from the Ash Center for Democratic Governance and Innovation at Harvard University for their “Sparking a Green Bank Movement” nomination. The Green Bank’s public-private partnership structure is often cited as a model for national green bank proposals introduced in Congress, which would rely on the issuance of federal green bonds for funding. Issuing Certified Climate Bonds further demonstrates the Green Bank’s commitment as a regional and national leader and model.

The Climate Bonds Standard and Certification Scheme is like fair-trade labelling for financial instruments. Rigorous scientific criteria ensure that the activities to be financed are consistent with the 2 degrees Celsius warming limit in the Paris Agreement. Climate Bonds Certification is used globally by bond issuers, governments, investors and financial markets to prioritize investments which genuinely contribute to addressing climate change.

Environmental Outcomes Measured by Metrics

The Connecticut Green Bank recognizes the importance of leadership in moving toward a zero-carbon future. To this end, the Green Bank has developed clear strategies to reduce greenhouse gas emissions in Connecticut and a mission to achieve cleaner, cheaper and more reliable sources of energy while creating high-paying jobs, supporting local economic development, and increasing accessibility and equity for all.

To serve as a leader and enter the green bond market successfully, these strategies and plans must be supported with metrics and data measurement that prove their efficacy.

“The Green Bank has thoughtfully built out our methodologies for assessing impact by consulting and engaging local and national experts,” said Eric Shrago, Managing Director of Operations at the Green Bank. “We have built a world class technological platform that tracks our projects and their performance. This has operationalized our impact methodologies so that we can speak to the societal benefits of all of our activities with ease and reasonable certainty. This transparency in methodology and data gives investors/stakeholders confidence that we are accomplishing what we set out to and demonstrates how we are doing.”

Beyond affordable and clean energy, many of these societal benefits align with those outlined by the United Nations in their 17 Sustainable Development Goals (SDGs), including ensuring good health and well-being, promoting decent work and economic growth, and building resilient infrastructure.

For example, through the RSIP, the Green Bank has reduced 749,500 tons of CO2e GHG emissions as calculated by Climate Action Reserve’s Climate Impact Score. This is the equivalent of 159,130 passenger vehicles driven for one year, 84 million gallons of gasoline consumed, or the emissions from 1.7 million barrels of oil consumed. Additionally, the RSIP has created more than 14,000 direct, indirect, and induced jobs.

Future Issuances

The Green Bank has plans for future issuances.

“The SHREC program and the Climate Bond certified asset backed securities will factor into the Green Bank’s plans going forward,” states Bert Hunter, Executive Vice President and Chief Investment Officer of the Connecticut Green Bank.  “By raising capital through the issuance of green bonds, the Green Bank can significantly scale-up its investment activities while increasing opportunities for private investment in our state’s clean energy economy.”

About the Connecticut Green Bank

The Connecticut Green Bank was established by the Connecticut General Assembly on July 1, 2011 as a part of Public Act 11-80. As the nation’s first full-scale green bank, it is leading the clean energy finance movement by leveraging public and private funds to scale-up renewable energy deployment and energy efficiency projects across Connecticut. The Green Bank’s success in accelerating private investment in clean energy is helping Connecticut create jobs, increase economic prosperity, promote energy security and address climate change. In 2017, the Connecticut Green Bank received the Innovations in American Government Award from the Harvard Kennedy School Ash Center for Democratic Governance and innovation for their “Sparking the Green Bank Movement” entry. For more information about the Connecticut Green Bank, please visit www.ctgreenbank.com.

 

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