1. The Southern California Public Power Authority is issuing a tax-exempt $159.4m project revenue bond to prepay for electricity from a wind farm.
The SCPPA is a non-profit “joint powers” agency of 12 public power utilities who come together to finance and acquire electricity generation projects, including many renewable energy projects.
Its model is to hold an undivided equity interest in the facility, issue tax-exempt debt financing to pay for the energy delivery, and sell 100% of the output to the interested members at cost.
This bond is the second; an 2010 bond for $237m (AA-/A1) won numerous 'deal of the year' awards.
2. Ecoplanet Bambooare aiming to raise $12m through asset-backed bonds of a bamboo plantation in Nicaragua.
Interestingly, the revenues from the plantation are placed directly into a trustee-held account to pay the interest on the bonds, with 25% of the funds accessible to the issuer for core operating expenses. This is reminiscent of innovative loan arrangements for CDM projects where prospective buyers arranged to place payments into a separate loan-repayment account rather than to project owners.
The structure allows for low interest rates in the early years when income is low (assuming that interest payments will be paid through leveraging carbon finance on the voluntary market, amongst other small scale activities), increasing in the later years once they start harvesting the bamboo.
3. In Delaware, US, the reportedly first energy efficiency tax-exempt bond has been issued by the States Sustainable Energy Utility (SEU) - a non-profit utility initiated by a highly-regarded climate scientist. It will raise $72.5 million through AA+ rated (S&P) issuance to fund an energy conservation programme and create 1,000 local jobs. What is interesting is that the bonds are backed by money-saving pledges from six different ESCos that will participate in the programme.
