2021 Summer Newsletter

Platform now in English & French!

The Platform website is now available in both English and French. The Platform's bilingual content is designed to reach all partners throughout the Great Lakes St. Lawrence region.

Le site web de la Plateforme est maintenant disponible en français et en anglais. Le contenu bilingue est conçu pour rejoindre tous les partenaires de la région des Grands Lacs et du Saint-Laurent.

The addition of French language content coincides with The Platform’s first project located in Québec.  The Québec Ministry of Finance funded the Bellechasse Bus Garage project in Montréal with a green bond. This project will seek LEED Gold certification and is designed to accommodate a fleet of 100% electric buses.

L'ajout du contenu en français coïncide avec le premier projet de la Plateforme situé au Québec. Le ministère des Finances du Québec a financé le projet du garage d'autobus de Bellechasse à Montréal au moyen d'une émission d'obligations vertes. Ce projet vise la certification LEED Or et est conçu pour héberger une flotte d'autobus 100% électrique. 

The Metropolitan Water Reclamation District of Greater Chicago will issue a green bond in order to create facilities that support the full-scale enhanced biological phosphorus removal (EBPR) process at the Calumet Water Reclamation Plant. The plan calls for converting existing tanks for use in the sidestream process. EBPR will be used to remove phosphorus from the treatment process to meet more stringent phosphorus limits as dictated in the NPDES Permit. 

Green lending saves high-quality Black Fork Wetland Preserve in Ohio

Located in the Muskingum River watershed, the largest watershed in Ohio, over 450 acres of high-quality habitat have been conserved through the efforts of the Western Reserve Land Conservancy and its partners. With 117+ acres of Category 3 wetlands and 7,295 linear feet of streams, the preserve is home to Sandhill Cranes, Snowy Egrets, Trumpeter Swans and Red-headed Woodpeckers. Over 160 acres of habitat will be restored to mitigate stormwater runoff that impacts downstream communities. 2,000+ tree seedlings will be planted to enhance carbon storage and climate resiliency. The project utilized a bridge loan in the amount of US$3.75M to carry the property while the Land Conservancy secured funding to purchase the preserve.

Green Bond Issuance in Our Region:
An Accelerating Trend for a More Sustainable Future

By Peter Adriaens PhD PE BCEEM, Director, Center for Smart Infrastructure Finance, University of Michigan

The interest of investors and municipal or public agency issuers to offer green bonds has been building in recent years, mainly driven by sustainability mandates and climate goals.  The emergence of a green premium discount (lower cost) – also known as a greenium - to these issuers has become an additional incentive for the increase across multiple uses of proceeds.  Until recently, no analysis had been carried out to evaluate the impact of this growing trend and to assess whether the greenium effect observed nationally and globally is also evident in the Great Lakes St. Lawrence region.  Furthermore, the Great Lakes Impact Investment Platform sought to explore what types of green bonds are offered, and how they may impact and grow sustainable investments in water and sewerage infrastructure with a positive impact on the region’s waters.

A total universe of over 900 green and standard-issue (vanilla) municipal bonds were issued in 2019-2020 capturing water/sewerage, housing, transportation, and renewable energy investments, based on data from the Bloomberg terminal.  With US$8.7 billion outstanding over 465 issues, the last two years have seen a 25% increase in green bonds as compared to 2008-18, but only in four US states (New York, Ohio, Illinois, and Pennsylvania). The total value of green bonds is more than three times that of vanilla bonds and saw particular growth in water/sewerage and energy.  Most of the water bond universe is comprised of agency issuers (393), who backed 125 green and 268 vanilla issues in the same timeframe.  Using a statistical matching technique, the greenium effect was estimated at 23 basis points across all bonds, mainly driven by mass transit and renewable energy issues.  When just water bonds were considered, 6 basis points of greenium were observed in the primary market, well-exceeding discount expectations by municipalities in the region. 

The growth trends in green bonds, increasing issuance for water infrastructure, and evidence of greenium effects portend an attractive value proposition for the region’s States and Provinces towards building a sustainable future.  The trends also present an opportunity for the projects on the Platform to attract capital flow for protecting the region’s waters while driving economic growth.