Bazalgette Tunnel Ltd has achieved S&P Global Ratings' highest Green Evaluation for its Thames Tideway Tunnel bonds program.

The ratings agency has completed its first UK-based Green Evaluation, which – valued at £10 billion – is also its largest to date.

Bazalgette Tunnel Ltd. established its £10 billion, multicurrency bonds program in June 2017. Proceeds are raised through its debt-financing platform Bazalgette Finance plc and used to design, build, commission, and maintain the Thames Tideway Tunnel (TTT) in London, U.K.  he proceeds of Bazalgette Finance bonds are allocated exclusively through Bazalgette Tunnel Ltd. the licensed Infrastructure Provider to the TTT project.

The company is required to disclose extensive information regarding the use of its proceeds, given that it is only permitted to undertake the construction and operation of the tunnel. The company has also published an environmental statement describing the project’s expected environmental impacts, in accordance with the U.K. Infrastructure Planning Regulations 2009, as well as an energy and carbon footprint report.

These provide a detailed assessment of the water, waste, carbon, and energy impacts of the construction and operational phases of the project.

The Green Evaluation applies to all bonds series issued under this program.

The financing received a very high Green Evaluation score of 95/100 or E1 (where E1 contributes the most to meeting climate change targets, and E4 contributes less). equivalent to an E1, the highest Green Evaluation score on the scale (E4 is the lowest).

The project’s favourable environmental impact and its Tier 1 position at the top of S&P’s  water sector hierarchy have also contributed to the overall score.

According  to S & P, the E1/95 score shows a weighted aggregate of very strong Transparency (88), excellent Governance (93) as well as an excellent environmental impact and resultant Mitigation score (97).

The Green Evaluation includes the positive environmental impact from the increase of available fresh water in the tidal Thames from wastewater treatment as well as carbon savings. Other positive environmental impacts of the TTT cited by S&P which are currently outside the scope of Green Evaluation include reducing water pollution and supporting local biodiversity

The excellent Mitigation score reflects S&P Global Ratings’ view that the system enhancement project will increase the availability of fresh water in the tidal Thames.

S&P Global Ratings Green Evaluation is an asset-level environmental credential which builds upon today’s existing frameworks of governance and transparency (e.g. Green Bond Principles) and considers approaches for climate resilience and environmental impact.

The Green Evaluation, which aims to provide investors with a more comprehensive picture of the green impact and climate risk attributes of their portfolios, can be applied to any type of financing, in part or in full.

S&P said benefits for investors from the independent and data-driven evaluation analysis and estimate of a project or initiative’s environmental impact and/or resilience level include:

• Meeting clients’ needs/requests and satisfying green mandates
• Balance risk-adjusted financial returns with sustainability benefits
• Reduced time to evaluate a complex and growing investment type

Launched in April this year, S&P Global Ratings' Green Evaluation aims to provide greater transparency and serve as a global benchmark for environmental impact and improved infrastructure resilience.

The ability to compare investments based on the environmental benefits they deliver to a wider stakeholder base will enable investors to rank and therefore price green securities according to their environmental quality.

The Green Evaluation tool can be used for any type of financial instrument including stocks, bonds, loans, and securitizations.