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Oct. 22, 2014 — Gov. Andrew M. Cuomo has announced the first transactions of NY Green Bank to kick off clean-energy projects across New York. These initial transactions, supported and agreed to in principle, 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 create 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," Gov. 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 these 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 roughly 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 by the governor 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's end.
