Low-Cost Capital Provided to Community-Based Lenders Will Support Projects That Reduce Greenhouse Gas Emissions in Disadvantaged Communities In April, Governor Kathy Hochul announced NY Green Bank, a division of the New York State Energy Research and Development Authority and the state’s clean energy and sustainable infrastructure financing entity, has launched a $250 million Community Decarbonization Fund. “As we continue to […]
Low-Cost Capital Provided to Community-Based Lenders Will Support Projects That Reduce Greenhouse Gas Emissions in Disadvantaged Communities
In April, Governor Kathy Hochul announced NY Green Bank, a division of the New York State Energy Research and Development Authority and the state’s clean energy and sustainable infrastructure financing entity, has launched a $250 million Community Decarbonization Fund.
“As we continue to build an equitable, clean energy future for all New Yorkers, NY Green Bank is sending a clear signal that our state is a leader in green infrastructure and economic development,” Governor Hochul said. “Increasing the capacity of community-based lenders to support clean energy projects in underserved communities across our state will improve access to renewable energy and healthier, affordable housing while we continue working to ensure a greener New York for all.”
The CDF, a wholesale lending pathway that will provide low-cost capital to Community Development Financial Institutions and other mission-driven lenders for local clean energy and building electrification projects and other scopes of work, will support lenders financing projects that reduce greenhouse gas emissions in disadvantaged communities.
The action supports New York’s equitable advancement toward the Climate Leadership and Community Protection Act goals of reducing greenhouse gas emissions 85 percent by 2050 and to ensure at least 35 percent with a goal of 40 percent of the benefits of clean energy investments go to disadvantaged communities.
“NY Green Bank’s focus on filling market gaps includes our dedication to engaging with stakeholders to ensure products are responsive to their needs. We are truly grateful for the input received that was crucial in developing the Community Decarbonization Fund and excited to work with community-based lenders to integrate green best practices into their already successful lending,” said NY Green Bank President Andrew Kessler.
While the CDF reflects an enhanced approach to expand green lending in DACs, NY Green Bank has been actively supporting projects in historically marginalized communities throughout its history.
“NY Green Bank’s Community Decarbonization Fund is a key component of a broader effort to expand and continually improve our product offerings while more effectively deploying capital within New York’s historically disadvantaged communities. This initiative reflects our commitment to an inclusive approach with involvement of a wide variety of stakeholders, and we look forward to enabling community-based lenders to expand their offerings to directly support projects in their communities,” said NY Green Bank Managing Director David Davenport.
As of December 31, 2022, NY Green Bank had made commitments of more than $216.5 million to projects located in DACs, including rooftop solar on affordable housing, and clean heating and cooling solutions (heat pumps specifically) in community facilities and houses of worship. NY Green Bank’s current pipeline of support for DAC-related projects is expected to advance the CDF’s commitment to invest $100 million for decarbonization of buildings in and/or serving DACs and $150 million for green affordable housing by 2025.
The CDF structure, design and offerings were informed by initial and ongoing solicitation for stakeholder feedback that began in December 2021, with invitations sent to over 130 entities, resulting in both individual meetings and 11 small group virtual roundtable sessions. These sessions served as opportunities for stakeholders to identify existing financing gaps and potential solutions which would expand the benefits of clean energy investments in DACs. A summary of the feedback provided in these sessions, including the recommendation for the fund announced today, is in the 2021-22 Amended Annual Plan filed with the Department of Public Service and available on the NY Green Bank website. NY Green Bank welcomes additional feedback on the overall structure, format and content of the request for proposals (RFP) itself, which can be provided by email to investmentRFPs@greenbank.ny.gov, with “NY Green Bank: RFP 23 Feedback” in the subject line.
Stakeholder engagement has continued throughout the development of the CDF to provide updates and receive feedback from participating organizations including:
- Property developers, service providers, owners and operators;
- Environmental justice advocates;
- Community-based organizations; and
- Community Development Financing Institutions (CDFIs) and other specialty finance companies with strong pipelines of affordable housing and other DAC-related clean energy and sustainable infrastructure projects.
NY Green Bank will host a webinar on May 11, 2023 at 10:00 a.m. to share more detail on the CDF, its intended purpose and eligible recipients. Please register here. For additional details please visit the NY Green Bank website.
Overall, since its launch in 2013, NY Green Bank has committed $1.9 billion across 120 transactions and mobilized $5.6 billion in capital as of December 31, 2022. Projects supported by NY Green Bank investments are estimated to result in annual greenhouse gas emissions reductions of up to 1,910,000 metric tons, equivalent to removing more than 415,000 cars from the road.