US fundraiser Reinvestment Fund announced the launch of the new Clean Energy fund, which will provide financing for small and mid-sized clean energy projects, including energy efficiency, renewable energy and other clean energy technologies that currently have limited access to traditional capital markets. The first capital for the Fund has been provided by 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.
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.
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 has been designed to bridge that gap and help bring proven energy technologies to smaller businesses and non-profits.
“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 provided 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 non-profit 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, 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.
Matt Sheedy, Head of Tax Credits, Social Investments at MetLife Investment Management, added that 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.
According to Peter Goldmark, the former President of the Rockefeller Foundation and former head of Climate and Air programs for the Environmental Defence Fund, the Fund is a giant step forward on the path of decarbonising the built space in the US, which accounts for roughly one-third of US carbon emissions. For the first time, it provides small businesses a large-scale financing mechanism aligned with the practical incentives that govern the behaviour of local building owners and retrofit installers.
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.
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