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July 8, 2019

Portland Water District issues first 'green' bonds

The Portland Water District plans next week to issue $6.5 million in “green bonds” to finance improvements to water mains, service lines and other infrastructure in its 140-square-mile service area.

The quasi-municipal agency said in a news release that the bonds, to be sold July 16, are for “environmentally beneficial projects designed to ensure safe drinking water” and so has designated them green. They are the PWD’s first bonds to carry that label.

The color coding is essentially a marketing tool, designed to help investors identify bonds that advance environmental goals.

“The holders of the bonds do not assume any specific project risk or economic benefit related to any of the funded projects as a result of the Green Bonds designation,” the district said in the release.

The first U.S. municipal bond to be called green in its offering documents was issued by Massachusetts in 2013. In 2017, Avangrid Inc. (NYSE: AGR), parent company of Central Maine Power Co., issued its first green bond to support three renewable energy projects.

Last year, investors bought a total of $580 billion in green bonds worldwide, according to Bloomberg Businessweek.

Total bonded debt for the water district was $91.6 million at the end of 2018, according to its annual report, including $12.6 million issued that year. The district provides water and wastewater services in 11 municipalities and has an annual budget of $43.6 million.

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