Investing in Green Infrastructure
By developing and investing in new green infrastructure, Covanta is helping to meet the needs of a fast-changing market and accelerate the green transition. These efforts demonstrate our commitment to environmental sustainability and to protecting tomorrow today.
WTE facilities represent key community infrastructure, providing local, reliable and sustainable waste management and energy services. In addition to providing day-to-day service, these facilities can help make the communities more resilient. In fact, when weather and other natural events disrupt the grid, WTE facilities can remain operational, managing both routine waste and the resulting debris from those events, regardless of whether the grid is able to receive the power it can generate. Already providing reliable power to water and wastewater treatment facilities in several communities, and even providing steam to the Army’s Redstone Arsenal, there is a further potential to integrate WTE into community microgrids.
As part of Covanta’s commitment to and ongoing investment in environmental sustainability, we issued our first set of green bonds in August 2019. The $50 million in tax-exempt bonds—issued through the Pennsylvania Economic Development Financing Authority, with a 20-year maturity and a coupon of 3.25%—comply with the Green Bond Principles. This bond issuance will finance eligible expenditures at selected facilities in Pennsylvania, including costs related to our metals recycling activities, construction of our new TAPS facility, and maintenance costs of our WTE facility.
As part of Covanta and EQT’s commitment to sustainability, EQT Infrastructure’s acquisition of Covanta was completed with the first ever sustainability-linked leveraged buyout (“LBO”) financing in the U.S., featuring environmentally focused KPIs with financial incentives attached to drive meaningful progress.
The sustainability-linked financing framework partners Covanta’s sustainability strategy with its corporate financial strategy. Under the framework, Covanta pledges to meet two long term goals to increase the total WTE processed, as well as waste recycled to reused materials, by 40 percent by 2030. These long-term goals are underpinned by two accompanying KPIs, which must be met by year-end 2025, compared to a 2020 baseline. The company faces significant financial penalties if it fails to meet the following targets:
- Demonstrating a cumulative growth of 2.5% of sustainably processed waste, which diverts more waste from landfills, therefore avoiding significant methane emissions
- Showing a 25% cumulative growth in waste recycled or reused, which also avoids emissions, as well as supports the development of the circular economy