Green bond dealers pore over new federal infrastructure plan
The Canada Infrastructure Bank is in talks with investment banks and private investors about potential sustainable debt deals in a fresh sign that this financing is set to gain traction in Canada.
The federal government-owned lender is implementing a $10-billion plan, of which at least $6 billion will be focused on projects typically associated with the sustainable bond market. Some $2.5 billion will be invested in clean power generation, transport and storage, $2 billion in retrofitting buildings to reduce emissions, and $1.5 billion for zero-emission buses and charging stations, according to the plan disclosed by Prime Minister Justin Trudeau earlier this month.
“Our involvement in these deals should provide an opening for ESG-type financing,” chief investment officer John Casola said. “I'm in discussions with green bond providers and they are looking for the kind of projects that we are going to get into.”
The CIB's plan is one of the steps being taken by the federal government to implement a road map on sustainable financing recommended in 2019 by a panel of experts led by Tiff Macklem, who took over as Bank of Canada governor earlier this year. In July, the government in Ottawa committed to provide funding to a Sustainable Finance Action Council, which will advise the government on the subject.
CIB expects to announce specific projects in areas such as retrofitting buildings in the coming months, Casola said.
“We very much hope that at the project level our participation will have the effect of bringing in private capital ...,” Casola said.