Georgia Power issues new type of bonds to benefit minority-, women-owned businesses




  • In Business
  • 2022-05-14 10:00:24Z
  • By The Augusta Chronicle
File/Augusta Chronicle
File/Augusta Chronicle  

Georgia Power recently announced it is issuing $1.5 billion in unsecured senior bonds aimed at supporting racial equality, economic opportunity and environmental sustainability.

According to a May 6 statement from the Atlanta-based utility, $800 million of the bonds were the first-ever Equality Progress Sustainability Bonds issued by a corporate borrower, and at least half of the net proceeds of those EPSB bonds will be spent supporting primarily minority- and female-owned suppliers.

Bonds are one of the many ways large companies, like utilities, pay for operations. When Georgia Power issues bonds, the buyers are investing in the company, which in turn will pay the amount of the bond back with interest. In this case, buyers focused on environmental issues and in supporting sustainability at Georgia Power will be the market for these bonds.

More: Georgia Power presents plan to reduce reliance on coal, boost use of renewables

The businesses that might benefit from the bond funds could be anything from vegetation management companies, which trim trees to maintain Georgia Power's system, to vendors who sell wires or companies that maintain generators, said Georgia Power Chief Financial Officer Aaron Abramovitz.

"It really is a long-time kind of commitment for Georgia Power Company. In 1978, we were one of the first utilities to establish a supplier diversity program or initiative," Abramovitz said.

Currently, Abramovitz said, about 25% of Georgia Power's spending is on diverse businesses, whether they are women-owned, minority-owned or even veteran-owned. Georgia Power has a goal to make that 30% by 2025.

Because the businesses receiving the proceeds are wide and varied, there aren't any particular eligibility requirements they must meet to receive bond funds. Abramovitz said there are certifications Georgia Power looks for which help certify businesses meet the criteria for the bond funds, like certification that a company is led by women.

For those companies that come close to meeting the criteria for an ESPB bond, but don't have the right certification or documentation, Abramovitz said Georgia Power will help them.

The money isn't awarded straight to a particular business, but instead goes into a general fund, Abramovitz said. However, an important aspect of the ESPB bond process is ensuring that the proceeds go where Georgia Power claims they will.

For accountability, Georgia Power has an independent contractor, Deloitte, complete the audits and report on how much money was allocated to which businesses so that shareholders, bond buyers and the company can track the money. Deloitte also is Georgia Power's regular auditor for its financial statements.

Georgia Power previously issued bonds to invest in solar power projects. Southern Company, Georgia Power's parent company, has issued 11 ESG bonds since 2015.

What makes the ESPB bonds different from what Georgia Power has done before is its focus on the social aspect of "environment, social and government." Abramovitz said that in the past, ESG bonds tended to be more broad and all sorts of activities like investing in renewable energy or doing a sustainability effort could qualify a company to use the bond proceeds. The ESPB bond, in contrast, is more targeted and has a percentage amount required to go to minority- or female-owned businesses.

This article originally appeared on Savannah Morning News: Georgia Power issues bonds to help minority and women businesses

COMMENTS

More Related News

U.S. core capital goods orders growth slows in April; shipments increase
U.S. core capital goods orders growth slows in April; shipments increase
  • US
  • 2022-05-25 13:36:15Z

New orders for U.S.-made capital goods increased less than expected in April, suggesting businesses could be slowing their pace of spending on equipment as...

Pandas wants to give Latin American businesses buying power in Asia
Pandas wants to give Latin American businesses buying power in Asia

Access to global supply chains can be difficult for small businesses in Latin America, but companies like Meru, which raised funding in March to source and import goods between Mexico and China, and now more recently Pandas, are tapping into overseas relationships and technology to make this easier. In Pandas' case, the company is doing something similar to Meru, but starting in Colombia, connecting small businesses directly with Asian manufacturers, so that they can reduce the high fees often imposed by half a dozen importers and intermediaries as well as logistical problems that all businesses are facing right now where inventory is now taking many more months to arrive than during...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business