The Maryland Economic Development Corporation sold $350.5 million in federally taxable green bonds to finance a renewable energy system that will power the University of Maryland.
The bonds mature between 2028 and 2057, paying interest at rates between 5.274% and 5.942%. They received a rating of A3 from Moody’s Investors Service and a green designation from Kestrel 360, Inc.
The corporation will use the bond proceeds to fund the NextGen Energy Program, a plan to upgrade the University of Maryland’s aging electricity network.
“The A3 rating reflects the essentiality of the Project to the University of Maryland,” Moody’s analysts wrote.
The university says that the NextGen program will put it on track to achieve a fossil fuel-free energy system by 2035. The plan’s implementation will reduce carbon emissions from its primary energy plant by 23% and save 50% of the total water usage the plant requires annually, according to the university.
The program involves working with private companies to update the school’s inefficient energy distribution system. The companies are collected under the umbrella Maryland Energy Impact Partners (MEIP) LLC, which includes Plenary Americas US Holdings Inc, Kiewit Development Company, Kiewit Power Constructors Co, and Honeywell International, Inc.
“NextGen will play a critical role in ensuring that the University of Maryland can depend on a sustainable energy system for decades to come,” the school’s NextGen website reads.
The bonds are limited obligations of the Maryland Economic Development Corporation, payable by a concession agreement between the university and MEIP.
Wells Fargo Bank, NA, served as underwriter on the issuance, purchasing the bonds for $349.2 million. The price reflected a discount of $1.3 million.