To finance a portion of its $2.6 billion DC Clean Rivers Project, DC Water on July 10 issued federally taxable “green” century bonds, the first issuance by a U.S. municipal water/wastewater utility of bonds that will be paid off over 100 years. Due to high demand, the sale of $350 million in bonds was $50 million higher than the planned offering.
Sold at an interest rate of 4.8 percent, the bonds mature in 2114 and will go toward financing a massive underground tunnel project includes construction of a 13-mile tunnel system that will transport combined sewer overflows (CSOs) to DC Water’s Blue Plains Advanced Wastewater Treatment Facility. The tunnels’ remediation of CSOs serves several “green” purposes including improving water quality for the District of Columbia, flood mitigation and waterfront restoration.
The tunnel is designed so it will not require significant maintenance for at least 100 years due to innovative engineering and the fact that it will be empty of water most of the time. DC Water General Manager George Hawkins said the exceptionally long-term financing will better match funding of the project with its expected life and share the enormous costs over additional generations of rate payers.
The underwriters of the issuance are Goldman, Sachs & Co. and Barclays. The bonds are rated by Moody’s Investor’s Service (Aa2), Standard & Poor’s (AA+) and Fitch Ratings (AA).n
Additional information on the bond offering can be found at www.dcwater.com/GreenCenturyBond.