New York Green Bank Opens for Business


The New York Green Bank has issued an RFP for developers, energy service companies, owner/operators and equipment manufacturers—as well as private-sector capital providers, including financial institutions or other third-party capital providers—to submit partnership arrangements that would facilitate the financing of qualifying clean energy projects in New York.

On February 5, 2014, New York Governor Andrew Cuomo announced the start of business operation for the New York Green Bank (the “Green Bank”). The Green Bank, first proposed by Governor Cuomo in his 2013 State of the State address, is intended to stimulate private-sector financing in clean energy projects in New York state by offering public–private partnership investment opportunities such as loan participations, project aggregation and credit enhancements. The Green Bank spearheads the Cuomo administration’s initiative to invest up to $1 billion in New York clean energy projects.

The Green Bank has been funded with an initial capitalization of $210 million, consisting of $165 million redirected from other clean energy programs by the New York State Public Service Commission and $45 million from the Regional Greenhouse Gas Initiative.

The Green Bank is seeking financing proposals from industry participants and financing institutions that desire to invest in creditworthy clean energy projects in New York state. The Green Bank is New York’s solution for eliminating renewable energy financing’s three habitual roadblocks to funding: (1) long loan tenure (through the Green Bank’s execution of debt securitization, allowing for investors to hold longer-term debt), (2) relatively small individual project size (through the Green Bank’s purchase, aggregation and securitization of solar loans from third-party intermediaries), and (3) the marginal investment grade of lender counterparties (through the Green Bank’s offering of a loan loss reserve fund, which would provide credit enhancements for its loan portfolio).

To view the RFP, please click here.

Ultimately, the overarching goal of the Green Bank is to provide the state with an opportunity to move away from state-backed incentive programs and grants and toward a model that promotes sustainable private investment in the green economy. To fulfill this goal, the Green Bank is endeavoring to become a fully self-sustaining, $1 billion support system for the clean energy market by receiving a clear financial return on its own investments and then recycling capital into the funding of future clean energy projects.

The New York Green Bank is the second of its type in the United States. Connecticut’s Clean Energy Finance and Investment Authority (CEFIA), founded in 2000, is the nation’s first fully funded green bank. Since its founding over a decade ago, CEFIA has funded more than $150 million in renewable energy projects, emerging technology investments, and education and awareness programs across the state of Connecticut.

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McCarter & English, LLP on:

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