A portion of the financing for North Vancouver Island’s two new hospitals will be provided through the issuance of ‘green bonds’, according to a report today from Bloomberg News. So-called green bonds are meant to provide environmental benefits while aiding in the financing of underlying projects.
In the case of the Comox Valley Hospital, it is anticipated that up to $230 million in bonds will be issued, maturing in 2046. Part of the BC Government’s criteria for awarding the project to Tandem Health Partners was that the winner obtain gold certification for the project from the US Green Building Council’s Leadership in Energy and Environmental Design program (LEED).
It is likely that the ‘green bond’ designation will allow the issuer to borrow at rates marginally below those that would be offered on similar projects that do not carry the green moniker. Many investors are quite willing to give up a few hundredths of a percentage point in return in order to support a project that places a high priority on environmental and social considerations.
Green bonds have become increasingly popular around the world for investors who wish to leverage their financial returns into more far reaching benefits to their communities and the environment.
The opinions expressed are solely those of the author, and do not represent the opinions of Portfolio Strategies Securities Inc. They are not a solicitation to purchase or sell any securities, whether specifically mentioned or implied. Do not act on the basis of this material without first consulting with your own professional advisors.