Governor Andrew M. Cuomo this week announced the first transactions of NY Green Bank to kick off clean energy projects across New York.
These initial transactions will ultimately produce investments totaling more than $800 million.
The projects, which are traditionally difficult for the private sector to finance, were made possible by NY Green Bank’s participation and are expected to result in an annual reduction of 575,000 tons of carbon dioxide.
“By leveraging the financial capacity of the private sector with an eye toward clean energy projects, NY Green Bank is creating a cleaner state for all New Yorkers,” Governor Cuomo said.
“The State’s contribution to these projects will support jobs and economic activity in our communities, and it is helping to grow the market for clean technology in New York by paving the way for more frequent and accessible funding going forward.”
NY Green Bank partners with private-sector lenders to support projects that cannot otherwise access the financing to make them happen. This is typically due to market barriers such as federal policy uncertainty, insufficient performance data and the lack of publicly-traded capital markets for clean energy.
By providing financial products to the lenders, such as credit enhancement, loan loss reserves and loan bundling, NY Green Bank alleviates these barriers, backing clean energy projects that create jobs and help make New York’s communities more sustainable.
The total estimated carbon dioxide reduction from the $800 million in investments is approximately equivalent to removing 120,000 cars from the road each year or planting 15 million trees per year.
NY Green Bank also benefits ratepayers because it operates in the same way a commercial entity would by making investments that will be repaid at market rates.
Additionally, by demonstrating the value of new financial arrangements and reducing risk, NY Green Bank and its private partners are creating a path forward for similar transactions to occur more regularly, on their own and without direct public financing.
The parties to the seven transactions announced today include Ameresco, Bank of America Merrill Lynch, BQ Energy, Citi, Deutsche Bank, First Eastern Investment Group, First Niagara Bank, GreenCity Power, M&T Bank, Renewable Funding, Sustainable Development Capital and Tulum Management. Terms are still being finalized and NY Green Bank is working to close the transactions by year-end.
NY Green Bank’s market focused approach of addressing financing barriers and enabling access to private capital makes it a first-of-its-kind institution that will increase investments in New York’s clean energy economy.
The financed ventures range from a small-scale commercial solar project in Lackawanna, to facilitating more cogeneration projects in New York City.
Richard L. Kauffman, Chairman of Energy and Finance for New York, said, “These transactions demonstrate NY Green Bank is working exactly how it is supposed to, through collaboration with the private sector and addressing the very issues that are preventing them from fully engaging in the clean energy marketplace.
“Each of these arrangements proves the private sector is ready to engage in public-private partnerships to drive a significant increase in New York’s clean energy economy, benefiting all New Yorkers.
“Today’s announcement cements New York’s strategy to transition to a more environmentally and economically sustainable energy infrastructure.”
M&T Bank Vice President of Middle Market Lending Susan Freed-Oestreicher added, “We believe the solar energy industry has the potential to generate further business investment in Western New York and helping to finance this economic development project makes sense for M&T Bank because it’s good for both our business and our community.
“We look forward to continuing our work with BQ Energy and New York Green Bank to make this project the next economic development success for our community.”