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Hospital costs to be partially funded through bonds
According to a June 25 report in the Bloomberg News, the provincial government will be financing a portion of the new Comox Valley and Campbell River hospitals through the issuance of what is known in financial circles as “green bonds.”
While an official press release from the provincial government had not been received prior to The Record going to print, it is being reported that up to $230 million in bonds will be issued.
The total estimated cost for the North Island Hospitals Project, according to the capital project plan released in July of 2012, is $600 million.
The bonds are an opportunity for locals to get involved in the building of the new hospital, in an investment format.
Adding to the allure is the “green” tag.
In order to be considered a green structure, certain architectural criteria must be followed in the design of the buildings, in terms of energy efficiency and the general environmental footprint left behind.
Andrew Pape-Salmon of RDH Building Engineering said the energy efficiency is critical.
“The building needs to meet a standard (in order to qualify),” he said.
“Low heat-loss, an air-tight building, but with good heat-recovery ventilation, and a high-efficiency heating system are (basics).”
Tony Edwards, an investment advisor at Portfolio Strategies Securities, Inc. in Courtenay, says that the green tag is the key to selling the bonds.
“My opinion is this, at least what I have found, is that many investors are willing to take a little bit of a haircut on returns, in order to support projects of this nature, that have that ‘environmental overlay,’” he said, adding that he thinks the bonds will go over well. “I am hoping I can get a hold of some of these for my clients here in (Courtenay).”
He said the lower return would not be substantial.
“By ‘lower return’ you might be talking… well, in the industry we talk about basis points, which is 0.01 of a percent, so you might be talking 10 or 15 basis points, which is 10 or 15 one-hundredths of one per cent. So not a huge difference, but it allows the financing to be done a little bit cheaper.”
According to Bloomberg, the bonds, which are to mature in 2046, were to be priced out on Thursday. For the Bloomberg report go to bloom.bg/1m5xZV2