Ohio Air Quality Development Authority Encourages New Investment by Launching Groundbreaking Green Bonds Framework

Christina O’Keeffe
Ohio Air Quality Development Authority

The Ohio Air Quality Development Authority (OAQDA) has a new tool in place to better position Ohio businesses to attract investment.

The agency, which supports clean air projects to help businesses meet regulations and their corporate sustainability goals, recently introduced a Green Bonds Framework as part of its Clean Air Improvement Program (CAIP). Qualified projects applying for financial assistance now have the opportunity to be considered for Green Bonds, a tool within the capital markets that attracts investors for eligible environmental projects.

The move is driven by an increasing focus on businesses and organizations that embrace Environmental, Social and Governance (ESG) initiatives. As attention on ESG factors has grown, many asset managers have deliberately chosen to direct investments that make a positive impact on communities. In fact, ESG investing has reached $8 trillion and can quadruple in the next decade, as reported by NASDAQ. Impact investing is here to stay.

Through OAQDA, Ohio is the first statewide authority in the U.S. to implement a dedicated Green Bonds program, which features robust transparency and accountability that can meet the demands of the investors who are motivated by ESG.

How to Apply

The Green Bonds Framework is designed to support projects that support the following environmental initiatives:

• Renewable energy
• Pollution control
• Energy efficiency
• Electric vehicle or alternative fuel infrastructure
• Recycling or waste disposal
• Mitigation of harmful environmental pollution

Acting as an intermediary between borrowers and private capital sources as a conduit bond issuer, OAQDA provides tax benefits to support these local projects.

Robust, industry-standard measurement and verification protocols are a requirement to validate the performance of projects that are selected for Green Bonds. In addition, an accredited external reviewer is included to issue an objective opinion on the merits of the project in alignment with the internationally recognized market standards. Similar to having an audited financial statement, having an external reviewer for Green Bonds gives investors assurance in the environmental benefits of projects. It also increases the likelihood of a pricing benefit for borrowers based upon assurance of validated ESG impacts.

OAQDA is committed to continual innovation and implementing new tools, like Green Bonds, to further position Ohio as a national leader in the pursuit of the mutual benefits of economic development and environmental protection. The Green Bonds Framework raises the state’s profile as an issuer of ESG bonds for prospective investors and helps position many deserving projects to attract this wealth.

A dedicated team at OAQSA stands ready to assist applicants through the process. For more information or to apply, visit ohioairquality.ohio.gov.