Toronto is set to follow Ottawa’s example in issuing green bonds later this year, the Financial Post informs. The city of Ottawa led the way last November with a breakthrough $102 million issue of 30-year green bonds, the proceeds of which were used to finance light rail transit in the nation’s capital.
In a posting on its website, the city said that its green debenture program “will leverage on the city’s low borrowing interest rates to help finance the city’s transit and other capital projects that contribute to environmental sustainability.”
The Toronto management said that the “expected growth of Green capital projects will allow the city to be a regular issuer of Green Debenture.”
While Toronto’s green debentures will have the same financial and legal characteristics of other city bonds, there is one difference with a green bond – and that is that the net proceeds will be used to fund projects supporting city’s environmental sustainability strategies.
Issuance of these types of bonds has been common in the U.S. municipal bond market. While the Canadian provinces of Ontario and Quebec have been issuers of green bonds, private sector companies and the Canada’s federal government have been slow to tap the market.
Toronto hired Sustainalytics, a leading Green Bond second-party opinion provider, “to review the Green Debenture Framework and provide a second-party opinion on the city’s environmental credentials and the framework’s alignment with the Green Bond Principles, as administrated by the International Capital Market Association.”
Read more at Financial Post