New York Governor Kathy Hochul announced a $20 million State Energy Financing Fund for entities offering affordable financing for decarbonization projects that deliver benefits to disadvantaged communities.This financing vehicle provides a complementary funding opportunity for entities also applying to the U.S. Department of Energy Loan Programs Office Title 17 Clean Energy Financing Program’s Section 1703, to support capital deployment for projects in New York State that reduce emissions from the built environment, including buildings and other infrastructure. The announcement supports the Climate Leadership and Community Protection Act goals to reduce emissions 85% by 2050 and ensure at least 35% of benefits — with a goal of 40% — are directed to disadvantaged communities.
“The State Energy Financing Fund builds on New York’s continued efforts to lead the nation toward a cleaner and more sustainable future by supporting innovative projects that reduce emissions and help us meet our climate goals,” Hochul said. “Through this fund, we are improving access to decarbonization projects in underserved communities across the state to help lower energy costs for New Yorkers and build a greener, more equitable future for all.”
Through the new program, administered by the New York State Energy Research and Development Authority (NYSERDA), direct capital support and credit enhancements are now available to entities actively working with or developing plans to apply to the LPO Title 17 Clean Energy Financing Program’s Section 1703 to deploy capital into decarbonization projects in New York State. Eligible projects must be decarbonization interventions that are designed to maintain or reduce customer energy bills, maintain or improve building comfort, and deliver resilient, durable solutions, or otherwise contribute to greenhouse gas emissions reductions.
Awards are contingent upon the applicant’s approval for the federal LPO Title 17 Clean Energy Financing Program’s Section 1703 financing. Funding will be awarded on a rolling basis and individual awards may not exceed the lesser of $5 million or 3% of an eligible applicant’s proposed project portfolio amount, subject to structuring terms and applicable federal, state, and local regulations. Applicants will be required to report on the number and dollar amount of investments into New York’s DACs funded through their respective Title 1703 facilities.
“NYSERDA is pleased to add another decarbonization financing tool to its plethora of programs that support the advancement of innovative and commercially available clean energy technologies that reduce emissions while delivering benefits, such as lower energy bills and more comfortable living and work spaces, to underserved communities,” said Doreen M. Harris, NYSERDA president and CEO. “By working hand in hand with our partners at the federal level, we are providing a joint pathway to lower the cost of capital for lenders to invest in clean energy technologies that will drive private sector investment and support an affordable energy transition.”
The DOE’s LPO Title 17 Clean Energy Financing Program issues loan guarantees to eligible innovative energy projects with a category for State Energy Financing Institution -supported projects that align federal energy priorities with those of U.S. States. The program was recently updated to allow LPO loans for projects that also receive financial support or credit enhancements from a State Energy Financing Institution (SEFI). Through that update, states now have access to this new path to help deploy already commercialized clean energy and decarbonization technologies, while harnessing the power of collective state and federal funding sources to advance such projects. By providing loan guarantees to SEFI-supported projects like those that will be supported under NYSERDA’s new program, the LPO can now also offer project financing to a wider range of borrowers under Title 1703, including those serving or operating in small, rural, and underserved communities.
The State Energy Financing Fund is funded through the Regional Greenhouse Gas Initiative (RGGI).
