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Historic initiative earns $52 million of bids for $13.5 million issuance, $1.1 million from local investors.
Today, Santa Fe made history by selling the State’s first-ever certified green bonds, positioning the City as a leader in sustainable projects.
The bonds, which were certified at the highest rating in February by the Climate Bonds Initiative, an international nonprofit seeking to mobilize the $100 trillion bond market for climate change solutions, will fund the City’s new eco-friendly wastewater system.
The event marked not only the first sale of green bonds in New Mexico, but the first sale of green bonds in the state certified by the Climate Bonds Initiative and the first time the global organization has certified an anaerobic digester as green.
The City had about a dozen new investors bidding on our bonds, citing the Green Bond status as the reason for bidding. There were $52 million of bids for $13.5 million issuance, $1.1 million of which were from local investors. The $13.5 million in green bonds will fund the new system over 20 years, at a time when interest rates are near historic lows.
The bonds will be used to replace the City’s antiquated wastewater system with an environmentally-friendly version. The new system will use the methane gas byproduct to generate electricity and heat. The City currently purchases most of the electricity to run the facility from PNM’s grid. By using the waste heat to warm the anaerobic digesters, the City will eliminate the need to buy natural gas and flare the methane, a greenhouse gas. Combined with the facility’s existing solar panels, up to 94 percent of the wastewater plant’s operational energy requirements will come from renewable energy.
“This conversion means the facility will no longer produce 3,100 metric tons of carbon dioxide equivalent per year. That’s the same as taking more than 600 homes off the grid annually or taking nearly 800 cars off the roads annually,” said Mayor Alan Webber, citing numbers derived from the Environmental Protection Agency’s greenhouse gas equivalencies calculator.
The City’s Finance Department recognized the project could qualify for green bond certification and that such a designation would align with Santa Fe’s Sustainable Santa Fe 25-Year Plan, which the City Council adopted in 2018. The plan lays out the City’s commitment to carbon neutrality and sustainability planning.
The City could have opted to self-certify, which is the lowest standard for green bonds. The Mayor instead went for the highest standard, which is Climate Bonds Initiative certification. To qualify, the firm First Environment had to verify that the project was green and that bond proceeds would be used to fund it.