After agreeing in principle to its first seven transactions, what’s next for the NY Green Bank?
On February 11, 2015, the Guarini Center hosted Caroline Angoorly, Chief Operating Officer & Managing Director of NY Green Bank, and Paul Francis, Distinguished Senior Fellow at the Guarini Center, to discuss this question.
The mission of the NY Green Bank is to accelerate clean energy deployment in New York State by helping to open up financing markets for clean energy projects. To accomplish this mission, Angoorly explained, NY Green Bank focuses on transactions at the “near frontier” of commercial investment – transactions that are scalable, replicable, and based on proven technologies, yet not being undertaken by commercial lenders because they involve a structure, scale, or tenor of investment that is outside the norm for commercial lenders. The Bank is a division of NYSERDA.
Angoorly described a successful first year for the NY Green Bank. The Bank has allocated its initial capital of $200 million to seven transactions that have been agreed to in principle; the Bank’s investment in these transactions has been matched by private sector investment of $600 million.
Four categories of financial products have been offered this year by the NY Green Bank – (1) credit enhancement to alleviate default risk; (2) warehousing/aggregation to provide short-term support; (3) asset loans and investments to provide long-term support; (4) and composites of those three categories. These categories of products are a result of the NY Green Bank’s collaborative Request for Proposals process, which Angoorly emphasized is not based on a pre-existing slate of specific products. This flexibility to the needs of the market, Angoorly said, is a key component of the Bank’s strategy to accelerate clean energy deployment in New York State.
Angoorly also discussed the capitalization of NY Green Bank. Initially contemplated at $1 billion, capitalization of the remaining $800 million is subject to approval in an ongoing proceeding at the New York State Department of Public Service. In making the case for the need to capitalize the remaining $800 million, Angoorly pointed to a Booz & Company study estimating clean energy investment opportunities in New York State at over $85 billion.
Going forward, said Angoorly, the NY Green Bank must build on its success and execute. The Bank will continue strengthening its portfolio, its internal processes, and its participation with other domestic and international green financing entities.