February 1, 2010 MONTPELIER, VT – The Vermont Economic Development Authority (VEDA) has given preliminary approval for the issuance of the first of up to $135 million in Recovery Zone Facility Bonds. Significant infrastructure upgrade projects planned by Green Mountain Power Corporation have received preliminary approval for $25 million in Recovery Zone Facility Bond support. The special facility bonds utilize federal tax exemptions provided through the American Recovery and Reinvestment Act.
“The Green Mountain Power project marks an important milestone in the Authority’s business financing objectives this year,” said VEDA’s Chief Executive Officer Jo Bradley. “As the ARRA Recovery Zone Facility Bonds are set to expire on December 31, 2010, it is vital that Vermont businesses be aware of this important source of funding.”
Pending final VEDA approval of the bond issue, Green Mountain Power plans over the next two years to undertake numerous large capital projects throughout Chittenden, Addison, Caledonia, Washington, Windham, and Windsor counties. Projects include substation upgrades, renewable energy deployment, hydro dam refurbishing, and reliability and transmission projects.
“Access to these funds means we can complete reliability and renewable generation projects at a lower cost for our customers,” said Dawn Bugbee, Vice President of Finance at Green Mountain Power. “Not only will this save our customers money, but communities will benefit because some of the projects will add to the local property tax base.”
Total project costs are anticipated to be $31.7 million in 2010, and an additional $46.6 million in capital expenditures in 2011. GMP received VEDA approval for a Public Offering with two series: $25 million in tax-exempt RZF bonds for 2010 capital expenditures, and $5 million in taxable bonds to support expenditures planned for the following year. Green Mountain Power serves 122 Vermont communities across nine counties in the state. The electric utility employs 191 persons, a number expected to grow modestly within three years, due in part to these projects.
VEDA’s Tax-Exempt Recovery Zone Facility Bond Program is designed to aid certain businesses through the issuance of tax-exempt bonds. Tax-exempt bonds traditionally carry lower interest rates than conventional bank loans because income earned by purchasers of these bonds is exempt from federal and, in some cases, state income tax. In the bond program, VEDA acts as a conduit issuer, thereby enabling eligible borrowers to access the tax-exempt market.
VEDA’s mission is to promote economic prosperity in Vermont by providing financial assistance to eligible businesses, including manufacturing, agricultural, and travel and tourism enterprises. Since its inception 35 years ago, VEDA has made financing commitments totaling over $1.5 billion. For more information about the Recovery Zone Facility Bond Program or VEDA’s other programs, visit www.veda.org or call 802-828-5627.
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Contact Information:
Jo Bradley
Chief Executive Officer
VEDA
802-828-5627
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