The New York Green Bank, a renewable energy financing program proposed by Governor Andrew Cuomo in his 2013 State of the State address, launched this week with a request for proposals aimed at overcoming market barriers to clean energy development.
Last December, Governor Cuomo announced the allocation of approximately $210 million to fund the Green Bank, including approximately $44 million from the sale of emissions allowances through the Regional Greenhouse Gas Initiative (“RGGI”). Cuomo intends to increase the capitalization of the Green Bank to $1 billion in the years ahead.
Instead of providing loans or subsidies directly to energy providers or consumers, the Green Bank seeks to partner with financial institutions in order to spur private investment in clean energy development. For instance, the Green Bank could assume a portion of the default risk associated with clean energy loans or leases in return for a fee, or purchase smaller clean energy loans and bundle them into volumes that could be resold on secondary capital markets. The Green Bank’s initial request for proposals therefore requires the involvement of at least one private sector financial party, either alone or as a part of a team with other energy industry participants.
The Green Bank provides a list of renewable energy technologies and energy efficiency improvements potentially eligible for financial support, but has also invited applicants to propose projects involving other technologies that “demonstrate a potential for increased deployment of energy efficiency or renewable energy and/or a potential for greenhouse gas reductions in New York State.” Nuclear energy, municipal solid waste combustion, and adulterated biomass or biofuels are not eligible for participation.
For more information on renewable energy financing and development, contact Scott Furman.