Verizon has now allocated nearly $2 billion in green bonds, making it the only U.S. telecom operator to fully issue and allocate two green bonds.
Green bonds are a way for enterprises to earmark funds for projects that positively impact the environment. The carrier issued its first green bond for $1 billion in 2019. Those funds were fully allocated in 2020 for renewable energy, green buildings, biodiversity, and conservation efforts.
Verizon’s second green bond was issued last September, and its $994 million in net proceeds has been fully allocated toward virtual power purchase agreements (VPPAs) for renewable energy projects.
In total, these projects are capable of generating a gigawatt (GW) of renewable energy across seven U.S. states — Illinois, Indiana, Iowa, Maryland, North Carolina, Ohio, and Pennsylvania. Solar energy will make up 83% of the renewable energy generating capacity, and wind energy will account for the remaining 17%.
The allocation of these funds will help “support the transition to a greener grid” and move the operator toward its 2035 goal of net-zero operational emissions, Verizon’s EVP and CFO Matt Ellis said, in a statement.
As a step toward that target, Verizon plans to source or generate renewable energy equivalent to half of its annual electricity consumption by 2025.
Verizon has entered into fourteen VPPAs in the last two years, securing 1.9 GW of renewable energy capacity. These agreements fund projects that are set to begin within the next three years.
Telecom operators require 24/7 access to electricity over large land areas, which means it’s challenging to directly use renewable energy sources as a main source of electricity. Instead, many telecom operators — including Verizon — plug into local power grids that provide fossil fuel-based electricity.
That’s where VPPAs come into play. VPPAs allow Verizon to fund the generation of renewable energy by providing funding to local power authorities to adopt solar and wind energy facilities.
According to its Green Bond Impact Report released today, Verizon claims the latest green bond will prevent 1.6 million metric tons of carbon dioxide equivalent emissions by financing renewable energy generation.
However, Verizon doesn’t expect its operations will be powered directly by these facilities. Instead, the power companies will sell solar and wind power locally, and Verizon will receive renewable energy credits (RECs) for the electricity sold.
Verizon’s RECs will help the operator measure advancements toward its renewable energy target. “With these agreements, we are making significant progress toward our renewable energy goal,” the report said.