On Monday, BMO, North America’s 8th largest bank (by assets, which currently number at $971 billion), announced that it has facilitated the world’s first green bond framework whose proceeds will be put toward nuclear power projects. The nuclear bond has been issued by Bruce Power, Canada’s only private-sector nuclear power generator, which is owned jointly by TC Energy, the Ontario Municipal Employees Retirement Systems (OMERS) pension fund, the Power Workers’ Union and the Society of United Professionals, and which currently produces 30 percent of Ontario’s electricity.
BMO acted as Co-Led Green Structuring Agent for the CAD $500 million (about $394 million) green bond issuance, which was made under a new ESG finance framework that will guide future green bond issuances with a focus on Bruce Power’s Life-Extension Program and investments related to increasing the output of nuclear units and extending the life of its plant on Lake Huron beyond 2060. These guidelines were created in accordance with the International Capital Markets Association’s (ICMA) Green Bond Principles as well as the Green Loan Principles issued by the Loan Market Association (LMA) and Loan Syndications and Trading Association (LSTA).
Additionally, CICERO Shades of Green, an internationally-recognized provider of independent review and second-party opinions on green financing frameworks, gave Bruce Power’s Green Finance Framework the highest possible governance score of Excellent, and an overall designation of CICERO Medium Green, acknowledging the role of nuclear power in mitigating climate change and recognizing Bruce Power’s strong risk management processes.
“Clean nuclear power is crucial to fighting climate change, and today’s announcement marks another industry-leading step in the company’s environmental, social and governance strategy,” said Bruce Power President and CEO Mike Rencheck. “One of the largest greenhouse gas emission reduction initiatives in the world was the phase-out of coal-fired electricity in Ontario, and Bruce Power was at the heart of making this a reality by providing 70 per cent of the energy the province needed to achieve this goal.”
“We’re proud to partner with Bruce Power to build a green framework that facilitates the alignment of the company’s business and financing activities to support nuclear power’s critical role in mitigating climate change,” said Jonathan Hackett, BMO Capital Markets Head of Sustainable Finance.
BMO has pledged to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025. In December 2019, BMO provided Maple Leaf Foods with Canada’s first sustainability-linked loan. Since then, BMO has completed sustainability and green financing frameworks, green and sustainability-linked loans for companies in a range of sectors, from manufacturing and packaging to metals & mining and energy.