Dive Brief:
- Texas' Fort Bend Independent School District will begin issuing $52 million in green bonds for school capital projects, the first district in Texas to issue them, an email to Education Dive disclosed.
- The bond money will be used to build three new elementary schools in the district, which will each embrace environmentally friendly construction adds, such as higher levels of recycled content, energy efficient HVAC equipment, and heat reducing features such as light-colored building materials and green space.
- The University of Texas, Indiana University, MIT and other higher ed institutions have all embraced green bonds in recent years to build LEED certified buildings on campus.
Dive Insight:
Bonds diversify financing options to improve or even construct completely new facilities, and experts predict green bonds will continue growing in popularity as investors become more environmentally conscious. And while Moody's projects bond returns are expected to decrease in coming years, it is likely they will continue to remain a viable financing option to enable districts and institutions of higher education to complete infrastructure upgrades.
The problem, however, is that institutions at both levels of education face increasing risk in taking on more debt to finance capital projects. As public investment continues to decline and schools are forced to look for creative ways to generate revenue, not just for construction needs, but to improve instructional quality as well, there will continue to be a difficult balancing act between the need to spend money to maintain competitive and increase revenue levels, while also remaining more austere in their budgets.