OPG expands green financing to include new nuclear

26 June 2024

Ontario Power Generation's new Sustainable Finance Framework replaces its 2021 Green Bond Framework and will permit funding of a broader range of clean energy technologies. It now allows net proceeds from the bond to be used for new nuclear projects as well as to provide funding for existing nuclear facilities.

OPG plans to build SMRs at the Darlington New Nuclear site (Image: OPG)

Green bonds are financial instruments that finance green projects and provide investors with regular or fixed income payments. The key difference between green bonds and regular bonds is that the money raised from investors is used exclusively to finance projects that have a positive environmental impact.

Ontario Power Generation (OPG) was the first Canadian utility to release green bonds in Canada and, together with its subsidies, has issued more than CAD3 billion (USD2.2 billion) of green bonds to date. In 2022, it updated its Green Bond Framework to allow net proceeds from green bonds to be used to finance maintenance and/or refurbishment of existing nuclear facilities, and issued a first-of-its-kind nuclear green bond offering for CAD300 million. The net proceeds from the issuance were allocated to the Darlington nuclear power plant refurbishment project.

OPG says the new Sustainable Finance Framework will permit funding of a broader range of clean energy technologies as well as initiatives to create opportunities for Indigenous communities and businesses. New nuclear projects, such as small modular reactors and large new nuclear, may now be financed from the net proceeds from OPG's sustainable bond issuance, as well as the maintenance or refurbishment of existing facilities.

The sustainable bonds may also be used to finance renewable energy projects like hydro refurbishment, solar, wind and hydrogen production; energy efficiency and management solutions such as energy storage and clean fuel storage; clean transportation initiatives such as zero-emissions vehicles; and developing climate adaptation and resilience capabilities for flood protection and extreme weather.

"As Canada's largest corporate green bond issuer, expanding our eligible use of proceeds from these bonds recognises growing demand for clean electricity and OPG's commitment to advancing economic Reconciliation with Indigenous Nations and communities," said OPG Chief Financial Officer and Corporate Services Officer Aida Cipolla. "Partnerships will be key to achieving economy-wide decarbonisation and lasting environmental benefits."

OPG recently completing early site works for the construction of the first of four BWRX-300 small modular reactors at its Darlington New Nuclear project, as well as being more than half-way through a CAD12.8 billion project to refurbish the four Candu units at its Darlington plant, which is scheduled to be completed by the end of 2026. It is also initiating a project to refurbish units 5-8 at its Pickering plant.

Researched and written by World Nuclear News