Posted on September 15, 2021 by Dave Kovaleski

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The Tennessee Valley Authority (TVA) this week launched a $ 500 million 10-year green bond offering, the company’s first offering of a sustainability-focused financial instrument.

The bonds will fund ongoing capital investments that build on TVA’s environmental, social and governance (ESG) initiatives and are aligned with its strategic intent and guiding principles. The aim is to move TVA forward towards a sustainable and zero carbon energy future by 2050.

“TVA’s financial position has strengthened over the past decade and we continue our disciplined financial approach as we invest in the energy system of the future,” said John Thomas, Chief Financial and Strategic Officer of TVA. “Low-cost financing of our strategic capital investments will help keep energy prices as low as possible, even as we move towards our ambitious goal of net zero carbon. “

The bonds carry an interest rate of 1.50 percent, which is the lowest rate ever achieved by TVA on a 10-year financing. The record rate will save TVA more than $ 15 million in annual interest expense compared to bonds maturing earlier in 2021.

The proceeds from the sale will be used to finance TVA’s major upcoming capital investments in increasing renewable energy production, energy storage, transmission system upgrades and the development of advanced technology. ‘clean energy. Potential solar projects in northern Alabama and eastern Tennessee are two other possible uses of the funding, pending approvals.

TVA’s green bond offering has attracted more than $ 2 billion in initial orders from a variety of investors, including fund managers, state governments, insurance companies and others.

Tammy Wilson, Treasurer and Chief Risk Officer of TVA, said: “Today’s record transaction demonstrates that the financial community is focused on investing in cleaner energy and supporting TVA’s sustainability goals.

TVA is a U.S. trading agency that supplies electricity to commercial customers and local power companies serving nearly 10 million people in parts of seven southeastern states.

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