The City of Columbia, South Carolina, is poised to make history by issuing it’s first-ever “green bonds” to improve its stormwater system, creating a lasting investment in sustainability.
The $37.9 million Green Bond sale has been certified by the Climate Bond Initiative, an independent global non-profit that rates environmentally responsible investments. The City’s inaugural Stormwater Revenue Bond transaction received high grade ratings of Aa2 by Moody’s and AA+ by S&P.
The bonds - sold on December 6th and senior managed by Siebert Cisneros Shank & Co., L.L.C. (SCSCO) the nation’s top minority- and woman-owned municipal finance firm - are the first stormwater secured green bonds in the U.S. to receive this highly regarded seal of approval. The transaction received strong interest, including orders from 36 investors -- with several stating that the green bond designation was a key factor in their investment decision.
Proceeds from the bonds will be used to upgrade and improve Columbia’s stormwater system, part of a $95 million investment over the next five years to address the City’s flooding and stormwater drainage issues. Improvements to the system have been prioritized to protect human life and health, appropriately maintain transportation and public infrastructure, and to reduce flooding, erosion, and sedimentation issues.
The upgrades to the stormwater system will include major improvements to stormwater conveyance system (including storm sewer, channels and ditches), stormwater detention facilities, stream restoration, and culverts, outfall stabilization and green stormwater infrastructure (such as bioretention facilities). The planned spending will improve the City’s ability to handle future flooding, creating further cost savings by preventing damage to both public and private property.
“As climate change brings more extreme weather, cities must prepare by building more resilient infrastructure that can withstand more powerful storms, even as populations increase,” said Columbia Mayor Steve Benjamin. “At the same time, we must invest smartly and in an environmentally responsible way so that we are helping to mitigate these problems and leave a safer, more sustainable world for the next generation.”
Green Bonds are a relatively new and fast-growing sector of the national municipal bond market, allowing public entities to finance capital construction in a way that supports environmentally responsible investment. “By issuing Green Bonds, the City has joined America’s leaders in environmentally-friendly infrastructure investment. The Green Bond product is a natural fit for municipalities especially during a time when investing in our infrastructure is imperative. We continue to see an increase in demand for Green Bonds as investors implement enhanced Environmental, Social and Governance (“ESG”) investment criteria.” said Suzanne Shank, CEO and Chairwoman of SCSCO.
The sale is expected to close on December 19th.