Climate Finance in Ontario

Blended finance: use of public funds to mobilize private capital Advantages • Mitigates market failures by mobilizing and leveraging private finance • Taps a large reserve of private capital • Some municipalities already have experience with debt financing and blended finance (Toronto HELP) Debt financing is a crucial tool in blended finance 4. What is debt financing? [...] Debt financing: financing of projects through borrowing • Debentures/Bonds: long term (more than 1 year) debt obligations issued to the public in the form of securities • General obligation bonds: backed by the full credit and assets of an issuer • Revenue bonds: backed by a specific revenue stream Pros and Cons of debt financing. [...] Ontario – Borrowing regulations Legal limits to all municipalities (Toronto and York are special cases): • For “municipal purposes” only • Ontario municipalities can issue general obligation bonds; only Toronto can issue revenue bonds • Long-term borrowing restricted to capital investments • Fixed rate borrowing is the rule; variable rate and foreign currency borrowing restricted • “Annual Repayme [...] A. Green Bonds Green Bonds used for the financing of climate adaptation and climate mitigation projects: • Can be either general obligation or revenue bonds • Can be either “labelled” (i.e. [...] Pros Cons Taps in to increased awareness of and Challenged by lack of standardization demand for environmentally and and difficult verification of the use of socially.