Asheville the first NC city to issue ‘green bonds’

Sustainability. Environmentally friendly. Green. These words not only apply to earth-friendly principles, they now also can apply to financial bonds. They are called “green bonds” and the money used – as well as the profits returned – finance environmentally friendly or sustainable projects.
Asheville is the first municipality in North Carolina to issue green bonds. Money from these bonds is being used to pay for infrastructure improvements and enhancements to protect Asheville’s water resources.
“We’re refinancing debt for improvements already on the books,” according to Barbara Whitehorn, City Chief Financial Officer. “As long as the underlying projects fit the criteria, we’re identifying opportunities to classify these projects as green bonds.”
Green Bonds raise funds for new and existing eligible projects with environmental benefits, according to the International Capital Marketing Association. Sustainable water management is one of the categories eligible for green bond financing.


‘Green’ financing used for water resource projects

Because of the mountainous topography Asheville faces special water management challenges, especially when it comes to pressure on its water lines.
“Our system is unusual in that even our average pressure is higher than most systems’ high pressure,” said Steve Shoaf, Water Resources Director.
That high pressure can result in high water loss, sometimes around 30 percent. While it’s not an unusually high percentage in a mountainous area, the City is working to limit that loss. Valve replacements help address that issue. So does enhancing water tanks, which in Asheville are not the sky-high structures seen in most places. They are lower to the ground because there is no need to enhance water pressure.
Some money used for Asheville’s green bonds was also used to replace failing water lines, “so we’re getting the water from point A to point B with fewer leaks,” explained Shoaf.
An emergency generator project was a large contribution to the Asheville Water Resources system. With the emergency generators, the City is able to keep its pump stations online even when power goes off. That means even in an emergency people can get water.
Improvement to the Bee Tree Reservoir spillway was another project financed with green bonds. The Bee Tree Reservoir is categorized as a watershed protection area.
In all, the City of Asheville has issued $55 million in green bonds to finance multiple watershed and water service protection projects.
“What I hope to see us do is every time we issue bonds is to go through our projects, look for qualifying projects and labeling these bonds green to show was we are doing,” said Whitehorn. “It informs the investor.”
“The bottom line is we’re protecting the resources,” said Shoaf.


Buying green bonds
How does an investor go about buying green bonds? Talk to your money manager when assigning assets to your portfolio.
For more information about the City of Asheville’s green bonds, visit

Photo above: Asheville’s Bee Tree Reservoir, which is categorized as a watershed protection area.