The Connecticut Green Bank was the first institution of its kind in the country. Dedicated to helping state funds reach projects to improve energy efficiency, expand green power projects and generally improve the state of Connecticut’s electric grid, the Green Bank achieves its goals through competitive loans and financial instruments.
The latest of these efforts is a series of “Green Liberty Notes” based on their already successful bond offerings. The original bond offering concluded at the end of 2021 and has been succeeded by programs administered directly by Avangrid and Eversource, the state’s two primary utility companies according to Bert Hunter, the Green Bank’s chief investment officer.
The bond program worked by investing the funds from the purchase of the bonds to pay for the installation of solar panels on homes and businesses participating in programs the Green Bank administered. Those panels earned the bank green energy credits, which were then sold to utility companies that were trying to meet renewable energy standards set by the state. The sale of the credits yielded the return on investment for those who held the bonds.
“We were the first in terms of a public authority to issue bonds secured by a solar revenue stream,” Hunter said. “In fact, we were the first green bank in the world to offer solar-backed green bonds.”
The bonds proved popular, but Hunter said that retail investors were frequently seeking opportunities to make smaller and smaller purchases.
“We surveyed investors in this state and found that $5,000 was really a pivotal point for them,” Hunter explained. “We said, ‘Well, what if we brought it down to $1,000?’ And then the number of people willing to participate went up.”
In discussion it came up that there was interest in purchasing bonds for even smaller amounts as well, but for regulatory reasons $1,000 was the lower limit of the price for which the bank could offer bonds.
“We wanted to make the green energy economy available to everyone,” Hunter said. “After an exhaustive search of various parties who could issue these micro-bonds, we wound up with Raise Green.”
Raise Green is a climate action investment platform financial technology platform for community-driven finance projects. Working with Raise Green, the Green Bank successfully launched a round of the Green Liberty Notes to raise $250,000 and is seeking to raise a similar sum with a second round scheduled to end on May 13.
Additional rounds are planned to be offered every quarter, with an initial cumulative goal of $2 million, but Hunter said that the holders of the notes can make investments as low as $100 and earn a 1.5% interest rate after they mature in one year, which compares well to current CD rates without requiring as large of an investment.
David Beech, the manager of the Green Bank’s Clean Energy Finance Team, indicated that the notes are already a success.
“We got investors from all over the country, and a strong majority of investors came from the state of Connecticut,” Beech said. “Something else that we’re proud of is that well over 50% of the investments we received on Green Liberty Notes have come in at less than $1,000. That was a key goal with Green Liberty Notes, to be able to get folks who don’t have $1,000 to spare, don’t have a broker, but want to be involved in helping fight climate change while finding a way to put their money somewhere that’s going to make a difference.”
Green Liberty Notes are available through Raise Green and a third offering will be available through the platform during the third quarter.
