DC Water gets S&P Green Evaluation

The District of Columbia Water & Sewer Authority (DC Water) has become the first U.S. municipal issuer to receive S&P Global’s Green Evaluation, scoring  E1 (the highest score on S&P Global’s scale of E1-E4) and 92/100.

The Green Evaluation was assigned to $100 million in series 2017A public utility senior lien revenue bonds (green labelled), the first water green bonds to be scored under the Green Evaluation framework.

S&P Global expects all 2017A proceeds to be allocated to projects that fit within the scope for wastewater treatment with energy recovery under the umbrella of the DC Clean Rivers Project, a two-phase $1.3 billion capital improvement project. When complete, the DC Clean Rivers Project will create 17 miles of tunnels with a combined storage capacity of 187 million gallons.

The Green Evaluation is attached (with a link below) and here are the key takeaways:

  • The overall score of 92 is a weighted aggregate of the Transparency score (90), Governance score (88), and Mitigation score (95);
  • The transparency score (90) reflects a robust annual reporting regime for bond proceeds and clear, comprehensive disclosure of the environmental impact of the project to investors;
  • The Governance score (88) is supported by the authority’s prudent management of bond proceeds as well as its clear and measurable standards for measuring the environmental impacts of projects financed with green proceeds;
  • The excellent Mitigation score (95) reflects our view that system enhancement projects, such as the DC Clean Rivers Project, directly increase the availability of fresh water and do not result in a significant by-product with a negative water impact.

The evaluation is available online here.

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