The trend of private renewable energy companies looking to raise funds through green bonds issues linked to specific assets continues to gain popularity.
The China Longyuan Power Group Corp — the largest wind energy developer in Canada — has reported that it raised $153 million for a wind energy project with 91.4 MW installed capacity in Canada. The bonds were issued at a coupon rate of 4.317%, and were managed by The Bank of Nova Scotia, Citigroup Inc., and HSBC Holdings Plc.
The wind energy project, located in Dufferin County, Ontario, has a power sale contract with the Independent Electricity System Operator of Ontario up to November 2034. The bonds will mature a year later. One may assume that the proceeds from the bond issue will be used to pay off the debt the developer would have had raised for the project’s construction.
Of late, several renewable energy companies have floated green bonds for specific goals and targets. Wind energy firm Xinjiang Goldwind Science & Technology received orders for $1.4 billion for a $300 million bonds issue, with the company stating that it would use the proceeds from the issue as working capital and for refinance purposes.
CLP India, also a wind energy developer, recently announced that it raised Rs 600 crore ($92.3 million) through the issuance of corporate green bonds. The proceeds from the bond issue shall be used for expanding the company’s renewable energy capacity.
Traditionally restricted to just development banks or government-backed institutions, green bonds are now being used for private sector companies as well to raise cheap debt finance. Some of the leading project developers that issued bonds this year include TerraForm Global, Goldwind, SolarCity, and Toyota.