The FINANCIAL -- Bank of America Corporation announced on May 14 that it has issued its second green bond for $600 million in aggregate principal amount, part of Bank of America’s ongoing commitment to accelerating the transition to a low-carbon economy by advancing renewable energy and promoting energy efficiency.
The bond will help fund projects under the company’s $70 billion multiyear environmental business commitment. In 2013, the company launched its current 10-year, $50 billion environmental business initiative to advance low-carbon economic solutions through lending, investing and facilitating capital, providing advice and developing solutions for clients around the world. The $50 billion commitment builds upon the company’s initial $20 billion multiyear commitment announced in 2007 and achieved four years ahead of schedule, according to Bank of America.
“We believe green bonds will play an important role in closing the financing gap for renewable energy, energy efficiency and other lower-carbon projects,” said Chief Operating Officer Thomas Montag. “The market for green bonds is expanding rapidly and issuing our own green bonds is one way we are helping to meet that growing demand.”
Bank of America has played a critical role in the development of the rapidly expanding green bond market. In 2013, the company issued the first benchmark-sized corporate green bond – a $500 million offering – and also co-authored the original version of the Green Bonds Principles (GBP), a voluntary set of guidelines to promote integrity in the development of the green bond market.
Building on those actions, last year, Bank of America Merrill Lynch was the number one underwriter of green bonds according to Bloomberg New Energy Finance. Renewable energy projects include financing of, or investments in, equipment and systems which facilitate the use of energy from renewable sources, such as solar, wind and geothermal energy. Energy efficiency projects help reduce energy consumption per unit of output and include projects such as lighting retrofits, co-generation and building insulation, in residential, commercial and public properties.
Proceeds from the previous green bond issued by Bank of America were used to finance projects such as the retrofitting of streetlights from traditional high pressure sodium to new LED technology in Los Angeles, Calif. and the installation of commercial photovoltaic systems that generate clean, renewable solar power for thousands of customers in the U.S.