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GBN Bulletin - May 2023

The first half of 2023 has seen notable growth of green financing on an international scale--from Australia, New Zealand, and India to Africa and the United States. The green bank model is at the epicenter for the collaboration between public and private financing in the transition to a clean economy. 

The Australian government expanded the role of the Clean Energy Finance Corporation (CEFC) in helping to drive Australia’s transition to net zero emissions by 2050. The Government’s May 2023 budget included an additional AUD$1 billion allocation to the CEFC to create a Household Energy Upgrades Fund, to provide low-interest loans for energy-saving home upgrades, and the creation of the new Hydrogen Headstart program providing revenue support for renewable hydrogen production through competitive production contracts. 

In New Zealand, the Minister for Climate Change announced that New Zealand’s Green Investment Fund (NZGIF) is to be provided with an additional NZ$300 million to invest in solutions to stimulate investment into low carbon companies and projects, and mobilize private capital.  This investment takes NZGIF’s pool of capital to NZ$700 million, making it one of the largest direct investors in New Zealand focused on climate change. 

In India, Tata Cleantech Capital Limited (TCCL) recently received a US$50 million investment from the International Finance Corporation in its Sustainability-Linked Bond. This will support the country’s shift to a clean energy economy as it is the first such instrument issued by a private financial institution in India. 

Meanwhile, the African Development Bank, through its pioneering African Green Bank Initiative, is set to roll out green finance facilities at host institutions La Caisse des Dépôts et Consignations du Bénin (CDC Benin) and the Ivorian National Investment Bank (BNI). This development is of principal importance as African countries continue to face significant challenges in financing their climate transition, capturing only 3% of global green financing funds. 

Finally, in the United States, the EPA released its Greenhouse Gas Reduction Fund (GGRF) implementation framework which will distribute US$27 billion in grant funding, US$6 billion of which will fund two to seven hub nonprofits with the intention of expanding green financing capabilities of public, quasi-public, and non-profit community lenders, including green banks. 

As the implementation framework of this funding is developed, green banks continue to demonstrate their value by fostering sustainable growth in their respective geographies. We look forward to their continued expansion in the remainder of 2023 as these financing frameworks revolutionize the power of capital and the pivotal role it will play in the fight for our planet. 
 

Happy reading, 

NRDC 
Green Bank Network Secretariat
 

Table of Contents:

  1. Recent Green Bank Transactions
  2. Green Bank Growth
  3. Reports and White Papers

Recent Green Bank Transactions

Banco de Desenvolvimento de Minas Gerais
BDMG is in the process of developing its climate strategy with the support of technical assistance provided by the Agence Française de Développement (AFD), a French development assistance institution. The primary objective is to promote low-carbon solutions, primarily through financing projects that contribute to greenhouse gas emissions reduction and address the challenges of climate change adaptation and mitigation. The climate strategy builds on prior institutional initiatives to promote renewable energy projects and sustainable agriculture. The strategy takes into consideration a reporting mechanism, awareness of future climate challenges, clear definition of goals and a transparent action plan for achieving the objectives and targets. 

The central element of the climate strategy is the establishment of goals for reducing greenhouse gas (GHG) emissions aligned with the targets set forth in the Paris Agreement. This will ensure the Bank's long-term competitiveness, as well as its ability to comply with evolving climate regulations and adapt to dynamic market changes. The development of climate targets will be guided by approaches such as the Science Based Targets Initiative (SBTI), which provides organizations with a clear roadmap for reducing GHG emissions. The strategy will also include Key Performance Indicators to enable effective monitoring of progress and will draw on initiatives such as the Partnership for Carbon Accounting Financials (PCAF), an effort to standardize the calculation of financed emissions.

Clean Energy Finance Corporation
The Australian Government has expanded the role of the CEFC in contributing to Australia’s transition to net zero emissions by 2050. The Government’s May 2023 Budget included an additional AUD$1 billion allocation to the CEFC to create a Household Energy Upgrades Fund, to provide discounted consumer finance to households, and the creation of a new Hydrogen Headstart program providing revenue support for renewable hydrogen production through competitive production contracts. 

The additional AUD$1 billion follows the October 2022 Budget which allocated AUD$19 billion to the CEFC as part of the Rewiring the Nation program and AUD$500 million for a new Powering Australia Technology Fund. All measures are subject to Australian Parliamentary approval. 

Recent CEFC investment activity includes (all $ in AUD): 

CEFC continues to gain international recognition including:  

  • Agri Investor Awards  naming it Institutional Investor of the Year in the Asia Pacific and placing it second in the Global Institutional Investor of the Year and Global Sustainable Investor of the Year categories, recognising the CEFC role in decarbonising Australia’s agriculture sector. A debt package for the fully merchant Golden Plains Wind Farm, to which the CEFC committed $175 million, was named Asia Pacific Renewables Deal of the Year in the 2022 Project Finance International Awards and was chosen among the Global Trade Review Best Deals 2023.  

  • RATCH-Australia was awarded IJGlobal 2022 Asia-Pacific Refinance Deal of the Year – Portfolio for its refinancing of three projects using a green loan under its green finance framework. The CEFC committed $50 million to the refinancing as part of a syndicate of lenders. 

See the latest transactions and announcements on the CEFC website

Connecticut Green Bank

CGB Green Liberty Notes LLC, a subsidiary of the Connecticut Green Bank, launched its fifth and sixth Green Liberty offerings, a crowdfunding campaign made possible in partnership with Raise Green, an award-winning online marketplace for impact investing. Its fifth offering far exceeded the maximum raise amount of US$250,000 in less than one week (total investment demand surpassed US$368,000). Through this offering, Connecticut residents and citizens nationwide can invest as little as US$100 to support small businesses improving their energy efficiency and reducing energy costs. 

CGB secured carbon credit capital funding to help accelerate the deployment of electric vehicle (EV) charging systems across the United States. Using an independent third-party certification methodology for electric vehicle (EV) charging systems, the Green Bank’s project has resulted in the issuance of valuable carbon credits by Verra’s internationally recognized Verified Carbon Standard (VCS) Program. The issuance of these EV charging carbon credits represents the Green Bank’s first entry into the carbon markets. 

CGB’s Solar Municipal Assistance Program (MAP) enabled the Town of Portland to install a PV system. Installed by Greenskies Clean Focus, Solar MAP provides technical support to municipalities to develop solar PV projects on municipal buildings, such as town halls, emergency services buildings, schools, and more. The Green Bank also provides financing for the solar systems through a power purchase agreement (PPA), which allows the municipality to access solar with no upfront installation costs, no new debt to incur, and no operations and maintenance costs. Portland announced the installation of a solar photovoltaic (PV) system at Brownstone Intermediate School. The 67 kW system is projected to save the Town more than US$10,000 annually in energy costs and more than US$206,000 over the term of the PPA.

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

DC Green Bank

Enterprise Community Partners and DC Green Bank have invested US$12.4 million to install 2.2 MW of solar panels at four affordable housing properties in Washington, D.C. The investment will bring solar energy to more than 500 homes while supporting job creation in the city. The solar panels are expected to eliminate greenhouse gas emissions by the equivalent of up to 1,794 tons of carbon dioxide each year. DC Green Bank supported the project with US$3.75 million in affordable construction financing. 

In partnership with Flywheel Development. DCGB announced the closing of a US$2.6 million pre-development and site acquisition loan to support the development of a sustainable commercial hub in the Trinidad neighborhood of Ward 5.  

DC Green Bank and SEDC Solar announced the closing of a US$1.4 million construction revolving loan facility to finance a portfolio of solar plus battery storage projects for homes, rental units, and community-serving institutions in Wards 4, 5, 7, and 8. Within the first year of the investment term, SEDC anticipates the installation of 1000 kilowatts of solar rooftop panels, resulting in an estimated greenhouse gas emissions reduction of up to 992 metric tons of CO2 equivalent per year for 20 years. 

DC Green Bank serves as the administrator of the Property Assessed Clean Energy (PACE)  Program on behalf of the District of Columbia. The DC PACE Program is a special financing option for renewable energy projects such as solar, energy efficiency upgrades like new windows or HVAC units, conservation projects like green roofs, and water use systems, whereby loans are repaid through property tax assessments. As administrator, DC Green Bank facilitates the deployment of private capital to qualifying projects. The DC PACE Program has facilitated loans totaling nearly US$100 million since its first deal closing in 2013. 

The DC PACE Program and Forbright Bank announced the successful financing of three new solar projects to deliver energy efficiency and renewable energy upgrades for properties in Wards 2 and 3. The combined projects will generate energy savings of approximately 400,000 kWh per year, resulting in the avoidance of greenhouse gas emissions equivalent to burning over 313,000 pounds of coal. In addition, the DC PACE Program and Stonehill PACE program announced the successful closing of nearly US$5 million in financing to deliver energy efficiency and renewable energy upgrades for a 13-story residential condominium building in Ward 6. Finally, in Ward 7, the DC PACE Program and United Bank closed US$125,000 in financing to support clean energy and energy efficiency improvements for a commercial building.

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

NY Green Bank

During the quarter ended December 31, 2022, NY Green Bank (“NYGB”) committed US$188.4 million across nine investments. NYGB’s investments continue to mobilize capital in NYS; at quarter end its portfolio was expected to support up to US$5.6 billion in project costs for clean energy and sustainable infrastructure projects. 

Below we’ve highlighted four key investments from the fourth quarter: 

On November 4, 2022, NYGB provided a US$12.0 million predevelopment loan that will fund predevelopment expenses for services such as architecture, engineering, Housing Quality Standards renovations and surveys. These services and milestones are required before the Sponsors can obtain the construction financing; they have been designated to receive as part of the New York City Housing Authority’s (“NYCHA”) Permanent Affordability Commitment Together (“PACT”) program. This designation is to rehabilitate the Frederick Samuel Apartments in Harlem. 

On November 10, 2022, NYGB closed a US$10.0 million revolving credit facility, with a US$15.0 million accordion feature, to Tenet Energy, Inc. NYGB’s facility will lend against electric vehicle auto loans originated by Tenet. This financing will provide Tenet with additional capital to provide financing to EV owners in New York State. The facility will allow Tenet to grow its EV auto loan portfolio and efficiently monetize auto loans through private securitizations or loan sales. 

On December 19, 2022, NYGB closed a US$21 million loan to Arthur May Redevelopment Holdings, LLC. The construction-to-term loan will finance the construction and operation of an electrified, mixed-use property; the Phase 1 facility will finance the renovation of a former school building and new construction. 

On December 19, 2022, NYGB closed a US$60.0 million participation in a US$250.0 million term loan to Hecate Energy, LLC. NYGB’s participation in the term loan will support Hecate Energy, LLC in selling solar and battery storage projects in the early stages of development. 

Additionally, in the early months of 2023, NYGB launched a US$250 million Community Decarbonization Fund (CDF). The CDF will be a wholesale lending pathway that will provide low-cost capital to Community Development Financial Institutions (CDFIs) and other mission-driven lenders for local clean energy and building electrification projects and other scopes of work. It will support lenders financing projects that reduce greenhouse gas emissions in disadvantaged communities. The announcement supports New York’s equitable advancement toward the Climate Leadership and Community Protection Act goals to reduce greenhouse gas emissions 85 percent by 2050 and to ensure at least 35 percent--with a goal of 40 percent--of the benefits of clean energy investments go to disadvantaged communities.

See all of NYGB’s latest transactions and announcements on the NYGB website.
New Zealand Green Investment Finance

New Zealand’s electric vehicle charging network is getting a boost with New Zealand Green Investment Finance’s NZ$1 million investment in EV charger and network management company Thundergrid. The NZ$1 million debt facility will enable Thundergrid to accelerate its rollout of EV charging infrastructure and develop other services to help its customers. This includes the ability to schedule charging to take place during off-peak times, making charging cheaper and more effectively distributing load on the national grid. 

NZGIF has launched the New Zealand Climate Clause Bank, a free resource that can help businesses make small climate-friendly changes that, across the economy, can have a big impact on emissions reductions. The clauses allow contract parties to take small steps to operate more sustainably in their interactions, for example, by measuring and reducing their greenhouse gas emissions, procuring or delivering low carbon goods and services, and minimizing air travel. 

NZGIF signed a major financing deal with Kinetic – Australasia’s largest bus transport operator – to help decarbonize public transport in New Zealand. Its NZ$50 million capex facility will finance electric buses and associated infrastructure. If fully drawn, the facility can fund more than 150 zero-emission buses and would help New Zealand avoid more than 100,000 tons of CO2 emissions over the life of the assets.  

Finally, on 9 May, the Minister for Climate Change announced that NZGIF will be provided with an additional NZ$300 million to invest in solutions to stimulate clean, green investment into low carbon companies and projects, and mobilize private capital.  This investment takes NZGIF’s pool of capital to NZ$700 million, making it one of the largest direct investors in New Zealand focused on climate change.

Rhode Island Infrastructure Bank

Rhode Island Infrastructure Bank has closed on US$15.8 million in loans for critical clean water and drinking water infrastructure projects in the City of Newport. A $12.5 million loan from the Bank’s Clean Water State Revolving Fund will finance upgrades to the Long Wharf Pump Station including replacing pumping and odor control systems, and the installation of a deployable flood barrier wall. A $3.3 million loan from the Bank’s Drinking Water State Revolving Fund will allow the Newport Water Department to replace water mains city-wide and to identify and replace all lead service lines connected to the project.

 RIIB’s Board of Directors voted to award a total of US$2.5 million in Municipal Infrastructure Grant Program funds to the communities of Pawtucket, East Providence, North Providence, East Greenwich, Lincoln, and Cranston for the completion of actionable, impactful projects identified through a request for proposals process. These projects include the reconstruction of sewer pipe connecting a Prospect Heights affordable housing development to the city sewer system, as well as funds for municipal green stormwater infrastructure and improvements to both above-ground public utilities and below-ground wastewater systems.

Finally, RIIB released a rolling application for participation in its Municipal Resilience Program. Municipalities with approved applications will participate in a workshop process to identify and prioritize local actions through the program and become eligible for grant funding to implement projects that increase climate resilience. In 2022, grants ranged from US$24,000 to US$650,000 on projects including improving coastal and forest resiliency as well as flood protection and water quality improvements. 

See all of the RIIB’s latest transactions and announcements on the Rhode Island Infrastructure Bank website.
Tata Cleantech Capital Limited

Tata Cleantech Capital Limited (TCCL), continuing its leadership in clean energy funding in India, has developed a quality lending portfolio aggregating to approximately US$1.3 billion as of end of March 2023. Through March 2023, TCCL has financed more than 300 cleantech energy projects totaling to investment of US$ 2.1 billion, with annual savings of 20.2 million tons of CO2 emissions. 

TCCL is also exploring projects in the green hydrogen space. It recently committed a short-term debt funding of ~US$ 50 million towards an under-implementation 300 MTPD Green Ammonia plant located in the north of India being developed by a leading renewable energy player in India. This is by far the largest green ammonia plant in India to date and will contribute to the country’s efforts to build large-scale green hydrogen production capacity. The investment by the RE player and the funding by TCCL reinforces the commitment to invest towards achieving India’s ambition to become a global green hydrogen hub.  

Recently, the International Finance Corporation (IFC) invested ~US$ 50 million in a Sustainability-Linked Bond (SLB) issued by TCCL. This is the first such instrument issued by a private financial institution in India and will support the country's shift to a clean energy economy. Utilizing this funding, TCCL will work towards scaling up on-lending towards renewable energy projects and diversifying into energy efficiency and e-mobility sectors over the next three years. 

At the 11th Green Energy Summit organized by the Indian Chamber of Commerce, Tata Cleantech Capital was recognized as the Top Financing Institution for the Renewable Energy & Energy Efficiency category and also received a Special Recognition under the Electric Mobility – Financial Institutions (Public & Private Transit) category. 

As part of its Corporate Social Responsibility program, TCCL has helped bring affordable and reliable electricity to a remote village in western India to support residents’ livelihoods needs. 

TCCL, along with Project SUNRISE, launched “Project Solar Oasis” – which entailed development of an active building that generates solar energy for supporting the building’s needs and help it supply machinery to support agricultural services and local handicrafts. Project Sunrise is a network of universities aiming to create a long-term sustainable energy collaboration between the United Kingdom and India, with a focus on low-cost solar power technology. 

Green Bank Growth

In April, EPA released its Greenhouse Gas Reduction Fund (GGRF) implementation framework which includes three complementary competitions to strategically distribute grant funding under the US$27 billion GGRF program. The goals of these competitions are to deliver tangible benefits including lower energy costs, good-paying jobs, and improved public health outcomes to households, businesses, and communities. The US$6 billion Clean Communities Investment Accelerator competition will fund two to seven hub nonprofits with the intention of expanding the green financing capabilities of public, quasi-public, and non-profit community lenders, including green banks. U.S. Representative Debbie Dingell (MI-06) said “[t]he Greenhouse Gas Reduction Fund is the single largest investment in clean energy and environmental justice in American history, based on proven green bank models that have been effectively enacted across the country.” 

Green bank expansion in the last several months has not been limited to the U.S. The African Development Bank is set to roll out the first green finance facilities in two public financial institutions in Benin and Côte d’Ivoire as part of its ground-breaking African Green Bank initiative. The host institutions are La Caisse des Dépôts et Consignations du Bénin (CDC Benin) and the Ivorian National Investment Bank (BNI). African countries still face significant challenges in financing their climate transition with only 3% of global green financing flowing into the continent. The African Green Bank initiative was conceived as part of measures to increase this percentage to 10% annually by 2030. Audrey-Cynthia Yamadjako, the Initiative’s coordinator, stated that US$1.6 million has already been secured to create the first two facilities. 

Finally, NZGIF received an additional NZ$300 million in investment capital, increasing its total pool of investment capital to NZ$700 million. Thus far, NZGIF has committed to 16 direct investments and has a pipeline of 15 different opportunities totaling more than NZ$300 million. As of June 30, 2022, NZGIF’s active investments were estimated to deliver more than 600,000 tons of carbon reduction over the lifetime of the investments, along with a range of co-benefits that enable the wider decarbonization of the economy. 

Publications & Events

CGB co-released the 2022 Connecticut Clean Energy Industry Report detailing the status of the current clean and renewable energy programs and the various contracts administered by electric distribution companies in the state. It highlights that more than 66,500 families and businesses have been able to reduce the burden of energy costs in their homes and buildings since 2011 through programs offered by CGB. The Green Bank has mobilized nearly US$2.3 billion into the state’s economy by leveraging public funds (roughly 70 cents a month from the typical household) to attract multiples of private investment at a seven-to-one ratio. 

CGB has a series of three webinars discussing residential solar in Connecticut, the second of which will be held on June 5th. It will focus on the role of financing, delving deeper into the structure and benefits of two loan products: the CT Solar Loan and the Smart-E Loan. Click here to register. 

BDMG released its 2022 Sustainability Report, providing transparency to the results and impacts generated by its activities. It highlights that BDMG distributed a total of R$2,422.8 million in releases for companies of all sizes and city governments from 562 municipalities – 26% more than in the previous year (2021). This article in Portuguese describes further what the report covers. 

McKinsey published a report titled “Delivering impact from US green bank financing” showing that green bank financing could mobilize hundreds of billions in investment toward net-zero emissions by 2050 as well as advance environmental justice goals in the US. 

See more white papers covering the green bank model on the GBN website's Knowledge Center.
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