City's First “Green Bonds” Finance $50+ Million in Indianapolis Stormwater Infrastructure Projects
The financing package conforms with international green principles for project selection and continues to support Indy’s high bond ratings.
INDIANAPOLIS— With a closing date last Thursday, February 24, 2022, the Series 2022C bonds issued by the Indianapolis Local Public Improvement Bond Bank have been designated as “green bonds” due to their alignment with sustainable development goals. The first such "green" designation in the City's history, the $50 million 2022C bonds fund many major stormwater infrastructure projects, both by paying off 2019 Stormwater Notes (at a par amount of $50 million) and additionally by generating about $9 million in premium for future projects.
Specified projects linked to the bond funding are recommended by the Indianapolis Department of Public Works and approved by the City-County Council as part of the Stormwater Capital Improvement Program. Some previous projects completed with this funding include: Fair Meadows Neighborhood Drainage Improvements; Norwaldo Area Neighborhood Drainage Improvements; and Drexel Gardens Area Neighborhood Drainage Improvements.
The green bond designation comes as the stormwater infrastructure projects accomplished with this funding are said by independent reviewer Kestrel Verifiers to “conform with the four core components of the Green Bond Principles 2021”. This relates specifically to how bond proceeds may be used (climate adaptation and resilience projects); how projects may be selected; how bond proceeds may be managed; and how information on proceeds will voluntarily be reported.
Kestrel Verifiers also noted an alignment with UN Sustainable Development Goals, including: Clean Water and Sanitation; Industry, Innovation, and Infrastructure; and Climate Action.
"Indianapolis continues to be on the leading edge of environmentally responsible policymaking, using the stability of our stormwater program to finance even more sustainable projects for residents," said Mayor Joe Hogsett. "Our city is renowned for responsible management of project financing, and this green designation further demonstrates our commitment to better neighborhoods and climate action."
Capital improvements to Indianapolis’ stormwater management systems targeted with this funding must support flood risk reduction, water quality improvements and integrated water resource management. Sustainable highlights include the incorporation of nature-based stormwater management solutions including hybrid ditches, the integration of city parks to manage water flow, and and channel restoration by daylighting enclosed creeks. The green bonds are also distinguished by their support of a just transition to a low-carbon economy by addressing flood mitigation and water quality with a focus on disadvantaged groups, including low- moderate-income neighborhoods that may be disproportionately affected by the impacts of climate change.
The “green” designation for stormwater project funding complements the work of the Indianapolis Office of Sustainability in its Thrive Indianapolis plan—the City’s first sustainability and resiliency action plan—urging more equitable policies and integrating climate change projections into new infrastructure projects.
"We are encouraged by the extra steps taken by the Indianapolis Bond Bank to achieve this sustainable designation for project financing," said Morgan Mickelson, Director of the Indianapolis Office of Sustainability. "In addition to our obvious support for the stormwater projects that will increase the resilience of our neighborhoods, we also hope this announcement leads more organizations to research the sustainable financing opportunities available to them."
The diversity that this bond designation brings to the Indianapolis Bond Bank builds on a pattern of consistently high-rated offerings, due to a track record of structurally balanced operations and growth. As the financial entity behind many large stormwater infrastructure improvement projects across the city, the Marion County Stormwater District has been recently rated AAA by both Standard & Poor's and KBRA (both affirmed in February 2022).