NY Green Bank Announces New Financing Pathway for Projects to Electrify Affordable Housing
Expanded Investment Approach Prioritizes Energy Efficiency and Electrification of Buildings in Disadvantaged Communities
May 12, 2021
NY Green Bank, a division of the New York State Energy Research and Development Authority (NYSERDA), today announced a new financing pathway for multifamily affordable housing electrification projects. The expanded investment approach, which comes in the form of a newly released Request for Proposals (RFP), will focus on projects that prioritize energy efficiency and electrification in housing found within disadvantaged communities across the State. This commitment to an equitable transition to a clean energy economy supports Governor Andrew M. Cuomo’s goal to deliver 35 percent with a goal of 40 percent of the benefits of clean energy investments to disadvantaged communities as outlined in the Climate Leadership and Community Protection Act (Climate Act).
Doreen M. Harris, President and CEO, NYSERDA said, "This new financing approach opens up another avenue for engaging the market and providing meaningful investment in the affordable housing sector, which supports the State’s efforts to reduce harmful emissions from buildings. NY Green Bank continues to demonstrate leadership in responding to the financing needs of the clean energy industry while recognizing the opportunity to focus commitment and attention on disadvantaged communities as directed by the Climate Act.”
Andrew Kessler, Acting President, NY Green Bank, said, “NY Green Bank recognizes that high-performance multi-family affordable housing is one of the critical areas in which clean energy and sustainable infrastructure investment is needed to provide tangible benefits to the State’s historically underserved communities. We are excited to grow our portfolio of clean energy investments to support high-efficiency, electric solutions in this space, while providing the financing support needed for a thriving green economy that benefits all New Yorkers.”
Through the request for proposals (RFP) launched today, NY Green Bank is seeking proposals from property owners and developers, energy service companies and equipment manufacturers, capital providers, and other market participants for construction or retrofit financing of multi-family affordable housing buildings in New York State to high levels of energy performance. This solicitation provides a pathway through which affordable housing market participants may engage with NY Green Bank and will enable identification and evaluation of financing opportunities that align with NY Green Bank’s commitment to deploy $150 million in affordable housing projects by 2025, as announced by Governor Cuomo in 2020.
This focused approach will provide:
- Products, terms, and rates that are calibrated to the needs of the affordable housing market and based on comparable affordable housing transactions;
- Selected indicative terms made publicly available, consistent with industry practice
- Beneficial impact to residents weighed as a key investment goal; and
- A dedicated senior team with extensive affordable housing investment expertise
Financing offerings include but are not limited to:
- Electrification/Energy Efficiency Improvement Loans: Project finance loans to support the purchase/lease and installation of specific equipment related to electrification, clean energy generation, efficiency/building envelope improvements, smart building technologies among other clean technologies;
- Predevelopment Loans: Flexible capital to support the cost-intensive repair (including Health & Quality Standards compliance measures), design, planning, and analysis required prior to construction;
- Construction/Construction-to-Perm Loans: Competitively priced gap financing to support a project’s construction or retrofit/installation phase with consideration for forward rate locks in some cases
- Permanent Loans: Competitively priced gap financing/mortgage participation such as incremental debt on a pari passu or subordinated basis, including at refinancing, underwritten to greater projected energy savings than is typical of other permanent lenders
This solicitation will remain open and responses will be evaluated on a rolling basis as received to ensure that all interested potential NY Green Bank counter parties have an opportunity to submit proposals for financing as market needs develop and change over time. An informational webinar, “Get to Know RFP 18”, featuring Vice President Tibita Kaneene, will be held at noon on July 14 to assist prospective proposers.
Reducing the energy use of multi-family affordable housing properties is critical to the State meeting its decarbonization objectives and also has the potential to deliver public health, environmental, and socioeconomic benefits to residents. By investing in the affordable housing sector, NY Green Bank anticipates it will demonstrate to public and private lenders the feasibility of underwriting to greater levels of expected energy savings. In addition, NY Green Bank estimates that it will invest $100 million in building electrification and energy efficiency in disadvantaged communities by 2025, including in non-residential building types such as schools, healthcare facilities and houses of worship. Benefits to disadvantaged communities are a primary consideration when evaluating proposals for financing including those that may not fit within the scope of this new solicitation. Proposers seeking financing for such projects are encouraged to submit proposals under RFP 1: Clean Energy Financing Arrangements.
NY Green Bank has an ever-growing, diverse pipeline that currently totals $789.9 million in clean energy investment opportunities across solar, wind, agriculture, bioenergy, energy storage, and renewable and energy efficiency. Commitments through the end of 2020 total over $1.2 billion and are expected to spur up to $3.4 billion in clean energy investments in New York.
For more information on the NY Green Bank, please visit greenbankny.ny.gov.
New York State's Nation-Leading Climate Plan
Governor Cuomo's nation-leading climate agenda is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as New York State recovers from the COVID-19 pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to achieving its mandated goal of a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030, and to reach economy wide carbon neutrality. It builds on New York's unprecedented ramp-up of clean energy including a $3.9 billion investment in 67 large-scale renewable projects across the State, the creation of more than 150,000 jobs in New York's clean energy sector, a commitment to develop 9,000 megawatts of offshore wind by 2035, and 1,800 percent growth in the distributed solar sector since 2011. Under Governor Cuomo’s leadership, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while meeting a goal to deliver 35 percent, with the goal of 40 percent, of the benefits of clean energy investments to disadvantaged communities and advancing progress towards the State's 2025 energy efficiency target of reducing on-site energy consumption by 185 trillion BTUs of end-use energy savings.
NY Green Bank
NY Green Bank is a division of NYSERDA. NY Green Bank is a state-sponsored, specialized financial entity working with the private sector to increase investments into New York’s clean energy markets, creating a more efficient, reliable and sustainable energy system. NY Green Bank’s investments and activities support Governor Cuomo’s nation-leading goals to combat climate change, as outlined in the Climate Leadership and Community Protection Act, which requires that 70 percent of the State’s electricity come from renewable sources by 2030 and calls for 9 gigawatts of offshore wind by 2035, 6 gigawatts of distributed solar by 2025, and 3 gigawatts of energy storage by 2030. To learn more about NY Green Bank, visit greenbank.ny.gov or follow us on LinkedIn.
NYSERDA, a public benefit corporation, offers objective information and analysis, innovative programs, technical expertise, and funding to help New Yorkers increase energy efficiency, save money, use renewable energy, and reduce reliance on fossil fuels. NYSERDA professionals work to protect the environment and create clean-energy jobs. NYSERDA has been developing partnerships to advance innovative energy solutions in New York State since 1975. To learn more about NYSERDA’s programs and funding opportunities, visit nyserda.ny.gov or follow us on Twitter, Facebook, YouTube, or Instagram.