GBN Bulletin - October 2022

This quarter has seen major news related to the growth of green financing in the United States. Included within the Inflation Reduction Act, codified into law by President Biden in mid-August, is $27 billion to establish the Greenhouse Gas Reduction Fund— a pool of money with major implications for the future of green banks and climate investment in the United States.  As the implementation of this money is developed, green banks across the US and the globe continue to demonstrate their value by financing deals and implementing projects that foster sustainable growth in their respective geographies.  

In New York State, NY Green Bank entered into a $5 million subordinated loan facility, originated through RFP 19, that will enable the New York City Energy Efficiency Corporation (“NYCEEC”) to make loans to finance energy efficiency projects in NYS that benefit Disadvantaged Communities. This financing will support building decarbonization projects in underserved communities in New York State, while resulting in nearly 13,000 metric tons of CO2 reduction across the lifetime of the project. 

In New Zealand, October saw 60 electric and low carbon emission vans arrive at NZ Post headquarters, as part of a $20m deal co-financed by NZGIF and NZ Post to decarbonize the national postal service’s contractor fleet. This is one of the biggest fleet electrifications ever undertaken in New Zealand, and as well as helping decarbonize NZ Post’s operations, the investment will also help kickstart a secondary market for used electric vans as they work their way down the ownership chain in the years to come. 

In Rhode Island, the Rhode Island Infrastructure Bank had a big impact across the state during fiscal year 2022, which concluded at the end of June. Across all programs, the Bank provided over $122 million in loans and grants for wastewater, drinking water, energy efficiency, renewable energy, and resilient infrastructure projects. Projects that supported over 3,000 jobs.  

In Australia, The Clean Energy Finance Corporation has marked its first decade of investment with a heightened focus on measures to accelerate the transition to net zero emissions by 2050 as it confirmed lifetime investment commitments of $10.76 billion. Together with institutional investors, business, industry, and cleantech innovators, the CEFC catalyzed $37.15 billion in investment in Australia’s low-emissions economy in its first 10 years. Learn more with the 2021-22 Investment Update.

Table of Contents:

1. Recent Green Bank Transactions
2. Green Bank Growth
3. Reports and Events

Recent Green Bank Transactions

Clean Energy Finance Corporation

For the second year in a row, the CEFC has been named a Responsible Investment Leader by the Responsible Investment Association Australasia. The accolade recognises a commitment to responsible investing and attributes as an investment manager. 

Recent CEFC transactions include: 

• A *$160 million investment to support the Southern Downs Renewable Energy Zone (REZ) that will help develop critical transmission and grid infrastructure to connect multiple clean energy assets in Queensland to the National Electricity Market.  

• Up to $200 million for a program to provide discounted finance to ANZ Bank business customers to encourage their investment in emissions reduction activities.    

• A $75 million commitment to one of Australia’s largest pastoral operators, Paraway Pastoral Company  to target cuts in on-farm methane emissions. 

• A $75 million cornerstone commitment to the first renewable energy platform for Octopus Australia marking the entry of a major global fund manager into the Australian market. 

• A $50 million cornerstone investment in the Ellerston 2050 Fund alongside a  commitment from Qantas Super to support the work of unlisted small to mid-sized companies that actively help reduce carbon emissions in the wider economy. 

• Up to $21 million to RCF Jolimont Mining Innovation Fund II, will support the private equity fund to unlock and commercialize innovative technology solutions to help mining operations decarbonize. 

The CEFC has also increased its investments in two of its Clean Energy Innovation Fund companies, Morse Micro, which specializes in highly efficient Wi-Fi chips for Internet of Things technologies, and hydrogen electrolyzer technology company Hysata. 

See the latest transactions and announcements on the CEFC website.

(*All CEFC $ references are AUD)

See all of Connecticut Green Bank’s latest transactions and announcements on the Connecticut Green Bank website.
 

See all of DC Green Bank's latest transactions and announcements on the DC Green Bank website

During the quarter that ended June 30, 2022, NY Green Bank (“NYGB”) committed $12.5 million across two new investments, according to its recent Quarterly Report. During the quarter, NYGB generated $6.9 million in revenue, bringing its cumulative total since inception to $153.2 million. 

In June 2022, NYGB entered into a $5 million subordinated loan facility, originated through RFP 19, that will enable the New York City Energy Efficiency Corporation (“NYCEEC”) to make loans to finance energy efficiency projects in NYS that benefit Disadvantaged Communities. This financing will support building decarbonization projects in underserved communities in New York State, while resulting in nearly 13,000 metric tons of CO2 reduction across the lifetime of the project. Significantly, this transaction also represents NYGB’s first concessionary loan to experienced lenders active in underserved communities, representing a model that will be expanded through NY Green Bank’s Community Decarbonization Fund.  

In June 2022, NYGB increased its existing senior-secured revolving credit facility with Sealed Inc., an energy service provider, by $7.5 million. The upsize to NY Green Bank’s existing loan will increase Sealed’s ability to offer an innovative financing option to cover the costs of home energy efficiency and HVAC electrification measures. This transaction will enable Sealed to expand its current operations and complete additional energy-saving improvements in homes in NYS. Additionally, this transaction will help establish a track record for this type of performance-based financing and demonstrate the ability of these projects to achieve competitive risk-return profiles. 

See all of NYGB’s latest transactions and announcements on the NYGB website.

The focus for New Zealand Green Investment Finance over the past two months has been the production of the organization’s first emissions benefit report, which estimates the decarbonization impact of the investments made between NZGIF’s establishment in April 2019 and June 2022. The full report will be posted on the NZGIF website by the end of October, but it’s estimated that NZGIF’s investments will reduce emissions by 580,00-710,000 CO2t-e over the life of the investments.  

October saw 60 electric and low-carbon emission vans arrive at NZ Post headquarters, as part of a *$20m deal co-financed by NZGIF and NZ Post to decarbonize the national postal service’s contractor fleet. This is one of the biggest fleet electrifications ever undertaken in New Zealand, and as well as helping decarbonize NZ Post’s operations, the investment will also help kickstart a secondary market for used electric vans, as they work their way down the ownership chain in the years to come. 

Towards the end of September, solarZero – one of NZGIF’s investees – announced they had been purchased by Black Rock Real Assets. solarZero operates an energy-as-a-service model, installing and maintaining a solar and battery system for homes, businesses, and schools with no upfront cost to the user. solarZero installs a new system every 35 minutes, and its acquisition by Black Rock Real Assets will helps its plans to invest $1bn in new solar and battery systems across New Zealand over the next 10 years. 

See NZGIF’s latest transactions and announcements on the NZGIF website.  

(*All NZGIF $ references are NZD)

Rhode Island Infrastructure Bank had a big impact across the state during fiscal year 2022, which concluded at the end of June. Across all programs, the Bank provided over $122 million in loans and grants for wastewater, drinking water, energy efficiency, renewable energy, and resilient infrastructure projects. Projects that supported over 3,000 jobs. 

In August, the Board of Rhode Island Infrastructure Bank voted to award a total of $1 million in the first round of the Municipal Infrastructure Grant Program funds to the communities of Central Falls, New Shoreham, Burrillville, and Glocester for the completion of actionable, impactful projects identified through a request for proposals process. 

Utilizing this funding, Central Falls will develop 47 new affordable apartments and commercial space, New Shoreham will build workforce housing for year-round residents, Burrillville will install a new sewer line to unlock new residential and commercial development in a key area for the town, and Glocester will complete a public drinking water feasibility study for the village of Chepachet. 

In September, the Bank received a $218,000 EPA Water Infrastructure for the Nation (WIIN) grant to replace residential drinking water pipes in North Providence. The grant will allow for approximately 50 homes to have their lead private-side service line replaced while Providence Water simultaneously replaces the public-side.

Recognition for TCCL's recent activities: 

The 10th Earth Care Awards (a joint initiative of JSW and The Times of India group) recognized Tata Cleantech Capital Limited as a winner in the Enterprise in the Renewable Energy space for its effort in developing and mainstreaming cleantech industry and financing large utility-scale renewable projects, thus contributing to India’s Net Zero vision. The project contributes to the UN Sustainable Development Goal 9: Industry Innovation and Infrastructure & Goal 13: Climate Action  

TCCL won the Green Urja Awards 2022 and was selected as the Top Private Financing Institution for Renewable Energy & Energy Efficiency in FY 2021-22 by the Indian Chamber of Commerce. 

Corporate Social Responsibility (CSR) program: 

TCCL has been associated with The Green Switch Project, which is designed to uphold SDG 7 (access to clean energy) and ‘Power for All’ scheme and bring clean energy to unelectrified remote villages through a community-company partnership model. Since 2017, more than 1300 homes in 33 remote and tribal villages in Maharashtra and Jharkhand now have access to electricity, for the very first time! 

The Green Switch Project follows the Tata Group philosophy and commitment to inclusivity and improving the lives of the Affirmative Action communities/ the underprivileged. 

United States: 

In August, President Biden signed the Inflation Reduction Act into law. The law includes $27 billion to capitalize the Greenhouse Gas Reduction Fund (GHGRF), which will provide grants to states, municipalities, tribal governments, and non-profit lending institutions, such as green banks, to deploy emissions-reducing technologies and programs. Over half of the $27 billion GHGRF is explicitly designated for investment in low-income and disadvantaged communities. A portion of the GHGRF may be used to establish a national green bank in the United States.     

The Green Bank Network recently hosted an event during Climate Week NYC that included a discussion of how the GHGRF will impact green banks at the local, state, and federal levels. At the local and state levels, the GHGRF has the potential to establish green banks in new geographies and provide capital to existing institutions that supercharge their current programs while allowing for expansion into new areas. It is a requirement of the law that all local and state dollars granted by the GHGRF must flow to low-income and disadvantaged communities. At the federal level, a portion of the GHGRF could be used to establish a national green bank responsible for direct lending, co-lending, and credit enhancements that will break down barriers to private investment in new projects that reduce emissions and create jobs that serve low-income, minority, distressed, and rural communities.

Australia:

The Clean Energy Finance Corporation has marked its first decade of investment with a heightened focus on measures to accelerate the transition to net zero emissions by 2050 as it confirmed lifetime investment commitments of $10.76 billion.  

Together with institutional investors, business, industry, and cleantech innovators, the CEFC catalyzed $37.15 billion in investment in Australia’s low emissions economy in its first 10 years. Expected lifetime emissions from CEFC investment commitments were more than 200 million tonnes of CO2-e on 30 June 2022, buoyed by landmark investments in the hard-to-abate manufacturing sector, which together are expected to eliminate some 900,000 tonnes of CO2-e annually.  Learn more with the 2021-22 Investment Update 

Legislation which enshrines the CEFC, has changed to include a specific reference to the role of the CEFC in emissions abatement, with respect to its role in facilitating “the achievement of Australia’s greenhouse gas emissions reduction targets.”  

India: 

Tata Cleantech Capital Limited, continuing its leadership in clean energy funding in India, has developed a quality lending portfolio aggregating to ~USD 1.15 billion as of the end of September 2022, comprising more than 310 Cleantech projects funded since its inception. The total Renewable energy capacity financed by TCCL to date is ~12.3 GW, with total estimated annual carbon emissions averted – 18.7m MT. 

Apart from funding renewable energy sectors like wind energy and solar ground mounted & rooftop projects across India, TCCL has increased its focus on Electric Mobility & Energy Efficiency sectors. Under Energy Efficiency, the key areas of focus for TCCL are Data Centers and Energy storage. 

Reports and Events