Connecticut Treasurer Denise Nappier said the state will follow green bond principles established earlier this year.

Connecticut will become the latest state to issue green bonds, state Treasurer Denise Nappier announced Wednesday.

Nappier said her office plans to issue environmentally themed bonds next month for up to $60 million of "critical" wastewater infrastructure projects statewide through the state's clean water program. The green bonds will be part of a $300 million general obligation offering.

"We are developing the new green bonds product to meet the needs of the growing group of investors who have mandates to invest in sustainable projects that will help preserve our environment for future generations," said Nappier.

Nappier said Connecticut will follow green bond guidelines, which are best practices for issuing such bonds. A group of environmental finance experts and banks active in the development of the green bonds market established them earlier this year.

To date, $51 billion of these bonds have been issued worldwide. So far in 2014, five municipal issuers have issued them.

Nappier's office is working on this inaugural project with JPMorgan, one of the banks that drafted the green bond principles.

"Increasing the amount of capital targeted to address pressing environmental challenges such as climate change is critical," said Marilyn Ceci, the bank's managing director and head of green bonds.

Massachusetts became the first state to offer such bonds to the municipal market with its $100 million fixed-rate, new-money offering in July 2013. This September, California conducted its inaugural green bond sale and Massachusetts its second.

Additionally, the New York State Environmental Facilities Corp. in June packaged $213 million in drinking water and wastewater projects as green bonds, and one month later, the District of Columbia Water and Sewer Authority sold $350 million of green bonds.

In New York City, Mayor Bill de Blasio and Comptroller Scott Stringer have each proposed environmentally themed financings.

De Blasio last month called for 24 solar power installations at city schools, with the city to fund all but $5 million of the $28 million cost. Stringer called for mainstreaming green bonds into GO offerings as part of the city's next major capital plan, in early 2015. According to Stringer, this would involve collaboration with the Mayor's Office of Management and Budget and other city agencies.

Nappier, a four-term state treasurer and former treasurer of Hartford, was a convener of the first investor summit on climate risk, held at the United Nations in New York. More recently, her office helped draft legislation to establish Connecticut's Green Bank, a quasi-public state agency to modernize Connecticut's energy strategies.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.