TVA issues $500M in bonds to fund green energy projects

10-Year maturity bonds are TVA’s first sustainability-focused financial instrument.

The Tennessee Valley Authority, power supplier to most of Northern Alabama, has issued $500 million in bonds to support capital investment in renewable energy, transmission and storage, and development of advanced clean energy technologies.

“A potential TVA solar project in northern Alabama and a potential TVA energy storage project in eastern Tennessee — both still undergoing detailed environmental reviews — are two possible uses of the funding,” TVA said in announcing the bonds.

The bonds, carrying a 1.5% interest rate — the lowest ever for a TVA ten-year financing — are aimed at helping TVA achieve “a sustainable, net-zero carbon energy future by 2050” without sacrificing low consumer costs and reliability.

“TVA’s financial position has strengthened over the past decade, and we are continuing our disciplined financial approach as we invest in the energy system of the future,” said John Thomas, TVA chief financial and strategy officer. “Low-cost financing for our strategic capital investments will contribute to keeping energy rates as low as feasible even as we make progress toward our net zero carbon aspirational goal.”

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Describing the agency’s first green bond issue as a “milestone,” Tammy Wilson, TVA treasurer and chief risk officer, said, “Today’s record-setting transaction demonstrates that the financial community is focused on investments in cleaner energy, and supportive of TVA’s sustainability goals.”

The bond offer drew more than $2 billion in initial order from investors. “Bank of America Securities served as Green Structuring Agent for the transaction, and joint book-running manager. Barclays, Morgan Stanley, RBC Capital Markets and TD Securities, also served as joint book-running managers for the transaction,” the agency said.

TVA has applied to list the bonds — which mature on September 15, 2031, and may not be redeemed early, but pay interest twice a year — on the New York Stock Exchange.

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