NY Green Bank Issues RFP to Support Lenders Serving Disadvantaged Communities
Will Enable Community-Based Financiers to Increase Support for Clean Energy Infrastructure Projects That Benefit Underserved New Yorkers
September 27, 2021
NY Green Bank, a division of the New York State Energy Research and Development Authority (NYSERDA), today announced it is seeking to make investments in clean energy lenders serving disadvantaged communities. The opportunity will enable community-based financial entities to support more high-impact, emissions reducing, clean energy infrastructure projects that benefit underserved New Yorkers. Today’s announcement supports the State’s goal of ensuring that a minimum of 35 percent with a target of 40 percent of the benefits of clean energy investments accrue to disadvantaged communities as outlined in the Climate Leadership and Community Protection Act (Climate Act).
“Today’s announcement is representative of NY Green Bank’s expanded investment approach to prioritize financing that will benefit New York State’s disadvantaged communities,” said NY Green Bank President Andrew Kessler. “We will continue to identify ways to meet the State’s climate justice goals through targeted investments and by collaborating with our market partners that are working at the local level to advance clean energy projects in all areas of the State.”
NY Green Bank invites disadvantaged community-focused financial entities – including community development financial institutions (CDFIs), insured credit unions and depository institutions, not-for-profit lending corporations and other eligible proposers – to submit proposals for a mandatorily redeemable preferred equity investment, which is a financial product that provides flexible capital with the ability to extend repayment contingent on performance. These investments will provide attractive, much-needed financial capacity under the expectation that, during the term of the investment, recipients significantly expand their financing of projects that both benefit underserved New Yorkers and reduce emissions. For more information on NY Green Bank’s preferred equity investment offering please visit the website.
Doreen M. Harris, President and CEO, NYSERDA, said, “Today’s announcement builds on NY Green Bank’s targeted investments and responsiveness to the needs of the clean energy market, advancing critical infrastructure support that will move us closer to achieving the State’s clean energy goals. By strengthening community-based lending capacity, NY Green Bank is empowering local organizations to extend their reach and impact where the effects of climate change often hit the hardest – disadvantaged communities.”
Through this new opportunity, NY Green Bank seeks to build the capacity of financial entities that demonstrate ongoing and growing capability to originate, underwrite, and manage clean energy and sustainable infrastructure project financings that reduce emissions and deliver benefits to disadvantaged communities in New York State. The development of this solicitation is the result of NY Green Bank’s extensive market engagement over the past year that found many lenders in this segment are equity capital-constrained, with more demand for their financing than there is supply.
“Community-development financial institutions have a track record of supporting local developers that build projects responsive to local needs and impacting historically underserved New Yorkers,” said David Davenport, NY Green Bank’s Managing Director, who recently joined the team to lead disadvantaged community-focused lending. “With this product, NY Green Bank will deploy preferred equity financing efficiently and at-scale into communities that have borne a higher share of the impacts of fossil fuel plant emissions and climate change.”
This announcement is NY Green Bank’s second solicitation of 2021 exclusively for investment proposals that create benefits for disadvantaged communities. In May 2021, NY Green Bank announced a new financing pathway for multifamily affordable housing electrification projects for buildings in disadvantaged communities.
NY Green Bank has made cumulative overall investments of $1.6 billion as of June 2021, which are expected to result in a reduction of greenhouse gas emissions equivalent to removing more than 300,000 cars from the road over the next 24 years. Currently, NY Green Bank’s ever-growing, diverse pipeline totals $790 million in clean energy investment opportunities. This portfolio of investments spans various sectors, including solar, energy efficiency, wind, storage, sustainable transportation, and across every region of New York State, with this variety expected to increase with the recent announcement of NY Green Bank’s first private capital raise.
New York State's Nation-Leading Climate Plan
New York State’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 achieve 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 investments to ramp-up clean energy including over $21 billion in 91 large-scale renewable projects across the state, $6.8 billion to reduce buildings emissions, $1.8 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $1.2 billion in NY Green Bank commitments. Combined, these investments are supporting more than 150,000 jobs in New York's clean energy sector in 2019, a 2,100 percent growth in the distributed solar sector since 2011 and a commitment to develop 9,000 megawatts of offshore wind by 2035. With the Climate Act as its guide, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while ensuring that at least 35 percent with a goal of 40 percent of the benefits of clean energy investments are directed to disadvantaged communities, and advance 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 New York State’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.
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