October 3, 2018

TransLink looks at issuing green bonds to finance capital projects

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Metro Vancouver’s transit authority is exploring the possibility of issuing green bonds, which would allow investors to put their money into environmentally friendly projects, such as rapid transit and electric buses.

TransLink’s chief financial officer, Rob Malli, is in New York this week at the Canadian Fixed Income Conference, where on Tuesday he will participate in a panel on green bonds.

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Malli said the experience will allow him to speak with investors about TransLink and its environmental commitments, and learn from other bond-issuers.

“We are preparing and doing all of our homework, and education, and awareness as we get ready to issue green bonds, so that we’re doing it in the most productive and informed way,” Malli said.

TransLink hopes to issue a green bond by the end of this year. Malli said green bonds are very similar to a conventional bond, which TransLink has issued for financing capital projects since 2010, but they’re certified so they can be included in so-called green investment portfolios.

“The difference is that with green bonds, we specify the projects, specifically, that are going to be funded through this and they exclusively apply to projects and activities with environmental benefits,” Malli said. “So basically, the investor has the additional transparency, and knowledge and confidence as to where specifically the funds are going.”

Although it’s too early to say what projects could be funded by a green bond — Malli said they’re developing a green-bond framework — TransLink is still looking to finance capital projects from the first two phases of its 10-year regional transportation plan, and is working on electrifying its fleet.

TransLink also recently made commitments to reduce greenhouse gas emissions by 80 per cent and use all renewable energy in its operations by 2050.

“The green-bond market is aligning to our ambition and commitments that are fairly aggressive,” said Malli. “Our aspiration is to be a leader in sustainable transportation.”

At this point, TransLink would be the first transit authority in Canada to issue a green bond. This comes on the heels of the City of Vancouver’s first green bond, which was issued last month and offered $85 million to fund “environmentally sustainable initiatives and projects.”

According to the city’s green bond-framework, eligible capital projects include investments in renewable energy, energy efficiency, green buildings, clean transportation, pollution prevention and control, sustainable water and wastewater management, and environmentally sustainable management of living natural resources.

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