The Fund will target small and mid-sized clean energy projects
Philadelphia, April 2, 2018 —Reinvestment Fund announced the launch of a new Clean Energy Fund, which will provide financing for small and mid-sized projects implementing energy efficiency, renewable energy and other clean energy technologies that otherwise have limited access to traditional capital markets. First capital for the Fund comes from a subsidiary of MetLife, Inc., one of the world’s leading financial services companies, which is providing $10 million in debt and Reinvestment Fund, which is investing $2.5 million.
“For well over two decades, we have been committed to using our resources to support projects that benefit struggling communities and are sustainable for the environment,” said Don Hinkle-Brown, President and CEO of Reinvestment Fund. “This new Fund allows us to channel affordable, longer-term capital to small and mid-sized energy retrofit projects nationwide that will generate valuable energy savings year after year as well as improve health and environmental conditions in the communities we serve.”
The Fund has already committed its first loan to Affordable Community Energy Services Company (ACE) to perform comprehensive energy efficiency and water conservation projects for Mercy Housing in California, the nation’s largest nonprofit owner of low-income housing. The $6 million project will benefit 6,000 affordable housing units in 90 multifamily residential buildings in California. The portfolio of energy retrofits installed and managed by Bright Power, ACE’s energy consultant and general contractor for the projects, which will save Mercy Housing each year an estimated 2.1 million kWhs of electricity; 32 million gallons of water and 23,000 therms of natural gas.
“The Clean Energy Fund will accelerate the availability of energy focused improvements for smaller- and mid-sized projects that represent so much of the built environment around us. Reinvestment Fund’s track record of delivering innovative, high impact projects make them an exciting partner to work with,” said Matt Sheedy, Head of Tax Credits, Social Investments at MetLife Investment Management.
“This Fund is a giant step forward on the path of decarbonizing our built space, which accounts for roughly one third of US carbon emissions,” said Peter Goldmark, the former President of the Rockefeller Foundation and former head of Climate and Air programs for the Environmental Defense Fund. “For the first time it provides small businesses a large-scale financing mechanism aligned with the practical incentives that govern the behavior of local building owners and retrofit installers.” Goldmark is also the founder of the New Energy Model Organization (NEMO), a startup dedicated to launching a national built space decarbonization program.
The new Clean Energy Fund will offer loans of up to $3 million with terms out to 15 years. The Fund’s primary focus will be on making capital available to finance energy retrofit projects backed by Energy Savings Agreements and clean energy generation projects backed by Power Purchase Agreements, as well as supporting portfolios of smaller clean energy projects.
Energy Savings Agreements are contracts under which a provider retrofits, at their own expense, a customer’s property and then manages its energy usage. The customer signs a long-term service contract with the provider, which the provider uses to recoup its costs and earn a return. However, the provider guarantees the customer that the savings will cover the costs of the upgrade, so the savings truly pay for the retrofit.
Power Purchase Agreements are long-term contracts under which a developer builds a clean energy generation project, like a solar array, and then sells the energy to a user, like a school or business. They allow the buyer of energy the benefit of predictable pricing and a clean energy supply, and the developer of the project a predictable revenue stream.
This kind of financing has been available for many years to large-scale Energy Service Companies that primarily serve governmental entities, large universities and health systems, and large corporations, and to utilities, but is more difficult for small and middle-market entities to access. The Clean Energy Fund is designed to bridge that gap and help bring proven energy technologies to smaller businesses and non-profits.
Reinvestment Fund began its clean energy lending practice in 1993 and has since invested more than $115 million in projects ranging from solar installations to energy-efficient retrofits. Over the past 25 years, these investments have helped create or conserve the equivalent of 8 million MWh of electricity, enough to power 855,000 homes for a year. These projects have provided environmental benefits by reducing carbon dioxide emissions by 10.25 billion pounds, sulfur dioxide emissions by 89 million pounds and nitrogen oxide emissions by 24 million pounds. The clean energy lending has supported energy upgrades for 3.5 million square feet of facilities.
About Reinvestment Fund
Reinvestment Fund, a social enterprise lending organization, is a catalyst for change in low-income communities. We integrate data, policy and strategic investments to improve the quality of life in low-income neighborhoods. Using analytical and financial tools, we bring high-quality grocery stores, affordable housing, schools and health centers to the communities that need better access—creating anchors that attract investment over the long term and help families lead healthier, more productive lives. To learn more about Reinvestment Fund, visit www.reinvestment.com.