Michael de Jong, Minister of Finance of British Columbia, announced that a green bond has been issued to finance the North Island Hospitals Project (NIHP) in Vancouver.
This is the first time a green bond has been used to fund a public-private partnership project in North America and the first time a green bond has been issued to finance public infrastructure in Canada.
The 32.3 year bond was issued by Tandem Health Partners, the preferred bidder for the project, who raised about CAD$231.5 million.
The underwriters of the green bond were National Bank Financial and Bank of Nova Scotia. The issue was oversubscribed by investors attracted by the strength of British Columbia's triple-A credit rating as the province is the provider of annual service payments to Tandem Health Partners.
Buyers were well distributed across insurance companies and fund managers, with both traditional buyers of public-private partnership project bonds participating as well as a number of new buyers. This successful issuance allows B.C. to provide leadership in a new and emerging green bond market in Canada.
The CAD$606.2-million PPP hospital project is being cost-shared by the Province (60%) and the Comox Strathcona Regional Hospital District (40%).
The preferred bidder consortium is formed by: Balfour Beatty Capital - Canada Inc., Gracorp Capital Advisors Ltd., Connor Clark & Lunn GVest Traditional Infrastructure LP, Graham Design Builders LP, Farmer Construction Ltd., Stantec Inc., and Honeywell International Inc.
Sean St. John, executive vice-president, co-head and MD, fixed income, National Bank stated:
National Bank Financial was privileged to act as lead underwriter on the first green public- private partnership bond issued in North America. In particular, we were very pleased to be able to assist the Province of British Columbia in achieving recognition of green principles that are built into the requirements on the North Island Hospitals Project.
Tandem Health Partners will deliver the North Island Hospitals Project including a new hospital in Campbell River and a new hospital in the Comox Valley.
The project will be developed on a design, build, finance, and facilities management for a period of 30 years. The joint venture is currently working with the Vancouver Island Health Authority to finalise financing and other aspects of the project.