The Connecticut Green Bank in Rocky Hill and Maryland-based Hannon Armstrong have reached an agreement that the Green Bank says “will increase the deployment of energy efficiency, solar and other clean energy projects throughout the Connecticut commercial and industrial sector.”
Under the terms of the agreement, Hannon Armstrong will provide access to up to $100 million in funding for green energy projects for commercial and industrial buildings and businesses. The agreement supports the Green Bank”™s successful C-PACE (Commercial Property Assessed Clean Energy) program.
Publicly traded Hannon Armstrong provides debt and equity financing to the energy efficiency and renewable energy markets.
The financing structure, termed “innovative” by the Green Bank in a prepared statement announcing the deal, allows the Green Bank to leverage private capital while providing Hannon Armstrong with the ability to access “a high-quality, rapidly growing class of assets.”
The Connecticut Green Bank, which was established by the Legislature in 2011, is the nation”™s first full-scale green bank, designed to leverage public and private funds “to drive investment and scale up clean energy deployment in Connecticut.”
“The agreement between the Green Bank and Hannon Armstrong will streamline the process building owners currently undergo to source competitive financing for comprehensive energy projects,” the Green Bank statement said. “Hannon Armstrong brings its expertise in programmatic financing and risk assessment, as well as predictability in execution, while the improved access to financing will enable Connecticut businesses to achieve even more meaningful energy savings with zero upfront costs.”
The agreement also helps the Green Bank expand C-PACE, which provides commercial, industrial, nonprofit and multifamily property owners access to affordable, long-term financing for what Green Bank terms “meaningful energy upgrades” to buildings.
“By enabling building owners to finance qualifying energy efficiency and clean energy improvements through a voluntary assessment on their property tax bill, more comprehensive energy improvements that would otherwise be difficult to afford are made possible,” the Green Bank said. “With 100 percent financing offered over a term of up to 20 years, building owners are able to complete projects that not only significantly lower energy costs but also increase their bottom lines while being cash flow positive from day one.”
While each project will be individually reviewed and underwritten, the statement said, capital provided under the program is secured by a lien on the property, reducing the investment risk and associated cost of capital. The Green Bank has already closed more than $50 million in C-PACE projects and said its pipeline represents nearly $50 million more in already-approved projects. “Demand is on a rapid growth trajectory, creating the need for more capital to support the program,” the bank said.
“Investing in energy efficiency and clean energy projects through the Connecticut Green Bank”™s C-PACE program provides Hannon Armstrong a new scalable channel partner to cost effectively deploy capital,” said Jeffrey Eckel, president and CEO of Hannon Armstrong. “We applaud the Green Bank”™s leadership in developing this market.”
“We in Connecticut have been innovators with our first-in-the-nation Green Bank,” said Gov. Dannel Malloy. “We”™ve shown that we can tackle global warming with smart, private-sector solutions and by leveraging private dollars to incentivize a shift to green technologies. Agreements like these are what”™s making Connecticut a national leader. We are reducing carbon emissions like never before as the world works together to mitigate climate change. This agreement is yet another positive step towards our goals of making the world a greener place for generations to come.”
