Fortis subsidiary and natural gas utility FortisBC Energy Inc. announced today that it plans to complete a public offering of a green bond. The offering would make FortisBC the first natural gas provider in Canada to offer a green bond.
Green bonds are securities issued specifically for financing environmental and climate-related projects. The bonds may be issued by government-sanctioned organizations, and typically enjoy tax incentives. The use of green bonds has increased significantly in recent years, with global issuance exceeding $250 billion in 2019, increasing more than 45% year-over-year.
The company stated that the debt will be issued under FortisBC’s Green Bond Framework and will allow the company to finance or refinance, in part or in full, new or existing projects that offer environmental benefits. The framework received a second-party opinion from CICERO Shades of Green, which verified that it aligned with the Green Bond Principles from the International Capital Markets Association.
FortisBC’s Green Bond Framework outlines five eligible project categories to which the proceeds of a Green Bond can be allocated:
- Renewable Energy – investing in geothermal, hydrogen, wind and solar projects.
- Renewable Natural Gas (RNG) – investing in projects involving RNG, bio-methane and other renewable sources and includes financial incentives provided to customers.
- Energy Efficiency – includes projects that reduce energy consumption, greenhouse gas emissions, or improve overall energy efficiency as well as supporting research and energy use studies.
- Pollution Prevention and Control – providing financial incentives to customers in the marine and commercial transportation sector to convert their engines to cleaner fuels such as compressed natural gas and liquefied natural gas.
- Clean Transportation – investing in clean energy transportation like electric vehicles and charging infrastructure.
FortisBC stated that by issuing Green Bonds, the company is taking further action to invest in projects that deliver environmental benefits, including reducing greenhouse gas emissions. These investments may contribute to the achievement of FortisBC’s ambitious 30BY30 target to reduce its customers’ greenhouse gas emissions by 30 per cent by the year 2030. These investments also demonstrate a long term commitment from FortisBC to support environmentally sustainable projects and a cleaner energy future for British Columbia.