LITTLE ROCK, AR – Today, Central Arkansas Water posted a $30.6 million green bond, certified under the Climate Bonds Initiative’s water infrastructure criteria – the first of its kind to acquire and protect forests specifically to support clean drinking water.
This bond will finance a combination of “green” and “gray” infrastructure projects to protect clean drinking water for the nearly 500,000 customers served by CAW, reduce waste, and increase efficiencies in water delivery.
“Central Arkansas Water is showing a lot of leadership with this innovation, and we expect to see other cities follow suit,” said Todd Gartner, Director of the Cities4Forests and Natural Infrastructure Initiative at World Resources Institute.
“We see that investors are increasingly drawn to green bonds, not only because of their social and environmental benefits, but because they are often smart financial bets built on a long-term vision,” Gartner said. “CAW’s latest green bond is attractive because it is one of the first to capitalize on the power of combining green and gray infrastructure for source water protection.”
The World Resources Institute (WRI), which partnered with CAW to prepare the issuance of the bond, said CAW is “leading the way” showcasing to other municipalities in the nation that they can follow suit by providing investors with transparent, sustainable offerings to “green” their portfolios.
Other media outlets have taken note. Environmental Finance, the online news service reporting on sustainable investments, first highlighted the offering. The Climate Bonds Initiative followed suit, noting that:
“This bond posting signals a recognition of the importance of valuing, protecting and enhancing ecosystem service functions alongside built infrastructure to increase resilience in the delivery of essential services, such as clean drinking water. In a time of diminishing municipal budgets, CAW is showcasing how medium-sized municipalities can be leaders in meeting sustainable development goals by safeguarding natural assets.”
View the full Environmental Finance reporting here:
DETAILS OF THE GREEN BOND
Thirty-five percent of the green bond proceeds are earmarked for green infrastructure and will support the acquisition of approximately 4,500 acres of forested land, building on the 11,458 acres of conserved forested buffer surrounding Lake Maumelle and its tributaries. This acquisition will result in 45% of the Lake Maumelle watershed being conserved as forest land. Keeping critical stream areas in forest cover and out of development or other converted uses enhance the natural ability of the land to provide filtration services for clean drinking water.
In addition to helping to meet regulatory provisions under the U.S. Safe Drinking Water and Clean Water Acts, the proposed green infrastructure projects will also protect the viewshed of the Ouachita National Recreational Trail, Pinnacle Mountain State Park (Arkansas’s most visited park), and Rattlesnake Ridge Natural Area and habitat for 11 species of conservation concern and provide public hunting and recreation opportunities. The bond will also finance the storage of tens of thousands of tons of forest carbon.
The gray infrastructure projects focus on improvements to pipelines and delivery systems to reduce leakage and repairs, increase water efficiency, and built infrastructure improvements to increase the resiliency of CAW’s ability to deliver clean, quality drinking water (spillway repairs, new generators).
“This bond is special because it will help secure clean drinking water for the residents of Central Arkansas by both financing state-of-the-art infrastructure and also protecting our rich forestland and other natural ecosystems”, said Tad Bohannon, Chief Executive Officer of Central Arkansas Water.
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Central Arkansas Water is the largest water utility in the state of Arkansas, serving 1 in every 7 Arkansans – about half a million consumers. CAW serves 18 communities and is based in Little Rock, the capital city of Arkansas.
World Resources Institute is a global research organization that turns big ideas into action at the nexus of environment, economic opportunity and human well-being. This work was made possible by the U.S. Forest Service, U.S. Endowment for Forestry and Communities, and the Healthy Watershed Consortium Grants Program.