ALBANY, N.Y. — Gov. Andrew Cuomo has launched the first step of his $1 billion New York Green Bank initiative through a petition to use approximately $165 million in uncommitted funds for the Green Bank’s initial capitalization. The petition was filed by the New York State Energy Research and Development Authority (NYSERDA) to the Public Service Commission (PSC). This initial funding, once approved by the PSC, will permit the Green Bank to leverage private sector financing for clean energy projects.

With this action, the Green Bank is anticipated to open for business and offer its initial financial products in early 2014. Cuomo introduced the Green Bank initiative in his 2013 State of the State address as the financial engine to help mobilize private investment to build a more cost-effective, resilient, and clean energy system in New York.

“Through the New York Green Bank, we will leverage public dollars to attract private sector investment into building a new clean energy economy that will help make our state greener and create jobs,” Cuomo said. “New York State has a track record of being at the forefront of environmental and energy policy innovations. As a public-private partnership, the Green Bank will implement a pioneering approach that strategically and efficiently uses limited state resources to drive investment into critical areas of the economy. With this initiative, we will promote job growth and business development, improve resiliency and air quality, and lower costs for consumers while providing them with greater choices and value for their money.”

NYSERDA anticipates that further capitalization of the Green Bank will be considered by the PSC in a subsequent proceeding. Both this petition and the subsequent PSC proceeding will include public comment periods. When fully capitalized, the Green Bank is expected to have a $1 billion balance sheet.

The Green Bank will partner with private sector lenders by providing financial products such as credit enhancement, loan loss reserves, and loan bundling to support securitization and build secondary markets. These products will support clean energy projects that cannot currently access financing due to market barriers, such as federal policy uncertainty, insufficient performance data, and the lack of publicly-traded capital markets for clean energy. According to the governor, these barriers limit private sector capital flows into otherwise attractive renewable energy and energy efficiency projects, creating gaps in the clean energy finance market. By alleviating these barriers, the Green Bank will enable the flow of private capital to fill these market gaps.

Capitalization of the Green Bank will not add extra cost for New York ratepayers. With the petition filed by NYSERDA, the state is seeking to capitalize the bank by repurposing a portion of existing energy funds.

“By incorporating a financing model into the state’s clean energy support toolkit, the state will derive greater private sector leverage from scarce public funding than the current incentive model alone,” said Richard Kauffman, chairman of energy and finance for New York State. “The Green Bank is the next step in our strategy to unleash markets to provide economic growth and to help transform New York’s energy system into one that is cleaner, more efficient, and offers more value to customers.”

For more information on the Green Bank initiative,

Publication date: 9/23/2013

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