New Mexico plans to issue specialized green bonds as it borrows roughly $12 million to complete efficiency and renewable energy upgrades on a fleet of state buildings in the capital.
The board of the New Mexico Finance Authority approved the additional borrowing Thursday to help fund improvements to about 30 state agency buildings in Santa Fe. The project upgrades or adds new solar panels, companion battery storage, electrical transformers, doors, windows, and heating and cooling systems.
Gov. Michelle Lujan Grisham and the Legislature already approved direct state spending of $20 million on the project in efforts to reduce energy costs and limit contributions to climate change.
The General Services Department expects to reduce its utility costs for the affected buildings by 50%, mainly on electricity, with annual guaranteed savings of $1.1 million written into an agreement with Trane U.S. Inc., a subsidiary of multinational Ingersoll Rand.
Thursday’s decision marks the state’s likely entry into a green bond market that can attract socially conscious investors including nonprofits and certain pension funds.
Zack Dillenback, chief lending officer for the Finance Authority, said it was too soon to tell whether the marketing of green bonds will save the state additional money by lowering borrowing costs.
Certifying the environmental benefits of “green” construction projects can require additional spending — and attract additional investors.
“It opens the door to different investors who specifically look for green bond credits,” Dillenback told the Finance Authority’s board of directors. “In some case studies, it can help. It’s even reduced pricing slightly.”
At least 19 buildings will be equipped to generate their own solar electricity under the two-year project. Currently, two buildings overseen by General Services are equipped with rooftop solar.
General Services Department Secretary Ken Ortiz said Trane’s direct workforce on the project is all based in New Mexico and that seven subcontractors out of 11 are local businesses.
The governor’s mansion in Santa Fe is the only eligible building that was not included in the upgrades.
Erica Velarde, energy engineer at General Services, said that decision was made last year during the administration of Republican Gov. Susana Martinez.
“That was something that was not pushed or wanted by the administration, so we just stayed away,” she said.