LOS ANGELES — Hawaii lawmakers approved legislation last week that extends authorization of $77 million in special purpose revenue bonds to fund the $250 million Honolulu Seawater Air Conditioning project.
The system would use seawater to cool buildings in downtown Honolulu. Construction is anticipated to begin later this year on the project that was first conceived in 2004.
House Bill 1951 would extend the bond authorization, due to expire on June 30, by five years. It was forwarded May 5 to Hawaii Gov. Neil Abercrombie for his signature.
Authorization for the bonds was originally granted in 2009, to assist Honolulu Seawater Air Conditioning, LLC, with the design and construction of the cooling system.
The unprecedented disruptions in the financial markets caused HSWAC to postpone the earlier sale of the tax-exempt bonds, Eric Masutomi, chief executive officer and president, told legislators in testimony before the vote.
"Current markets have improved and there is now suitable interest in financing this renewable project," Masutomi said.
HSWAC, which plans to start construction later this year on the project, expects to tap the total bond authorization within the next three years.
The company has secured bonding capacity totaling $145 million for construction of its cooling system. HB 1951, extends prior authorization on $77 million of bonds needed for the project.
Financing will include the tax-exempt revenue bonds, $113 million in taxable revenue bonds and $47.8 million in private equity.
The project will draw cold, deep seawater from four miles off Oahu's southern coast into a cooling station in Kakaako. The seawater will then pass through heat exchangers and be dispensed through a network of distribution pipes to downtown buildings. It involves installation of 15,000 feet of pipeline and would affect 12 streets and their intersections in downtown Honolulu.
The project will service approximately 14,000,000 square feet of downtown building space, according to the legislature's Committee on Energy and Environment.
Even if the governor signs the bill, approval of bond issuance will still require further discussion and satisfactory review of the financing components involved in the transaction, Kalbert Young, the state's budget and finance director, said during testimony given prior to the bill's passage,
The company also has a second seawater cooling system planned for Waikiki.
