By William Opalka

New York’s Green Bank has generated so much interest from clean energy and energy efficiency developers that it is asking to borrow from the private markets as well as revise allocations from its state sponsor.

In a report filed with the New York Public Service Commission on Thursday, the bank’s sponsor, the New York State Energy Research and Development Authority (NYSERDA), said its schedule to capitalize the bank with $1 billion over five years is inadequate for its potential project portfolio.

It is asking the PSC for permission “to obtain an external borrowing facility to provide the necessary liquidity and the certainty of sufficient available capital that is critical for private sector engagement” (14-M-0094). The bank was initially funded with $200 million last year and has received requests for $734 million through mid-June.

In its annual business plan filed on June 19, the bank said it has received funding applications that could be leveraged into more than $3 billion worth of clean energy projects statewide.

‘Pillar’ of REV

The bank is one of four initiatives of New York’s Clean Energy Fund, which NYSERDA calls a “key pillar” of the state’s Reforming the Energy Vision program. The fund also includes the $1 billion NY-Sun initiative to build solar projects throughout New York. (See New York PSC Bars Utility Ownership of Distributed Energy Resources.)

The bank’s business model is predicated on projects receiving $3 from the financial markets for every $1 in publicly backed funds.

More than half of the current funding requests — in both the number of projects and their financing needs — has come from energy efficiency programs. The rest is divided among wind, solar, bioenergy and other projects.

The $734 million in funding requests are in various stages of the bank’s pipeline. As of June 12, the Green Bank had $338 million of projects in its “active portfolio,” meaning they had passed advanced stages of review by its scoring committee. About $500,000 in transactions have closed.

The bank started in 2014 with plans to be capitalized with $1 billion in public funding over five years. Last year it received $165 million in ratepayer funds through the system benefits charge (SBC) and another $45 million from New York’s share of money from the cap-and-trade program of the Regional Greenhouse Gas Initiative.

Seeking Advance

NYSERDA says it appears the bank’s current funding levels will be unable to keep up with the amount of projects seeking aid.

The bank is seeking an advance of $150 million now to keep momentum going in the project pipeline. It would then draw funds from NYSERDA over a total of 10 years instead of five, with lower annual allocations over the extended time frame. It said the private credit facility it is seeking “would be put in place at the point it is needed, sized to ensure that the available amount  would not itself become the constraint on [the bank’s] ability to run and grow its business.”

Without the $150 million, NYSERDA said, the bank will lose $1.5 billion in private investment over the next decade.

The bank’s aim is to become self-sustaining within a few years as loans are repaid and that money is recycled to fund future projects. The bank anticipates it will reach a “steady state” of annual commitments of about $200 million.

The bank was formed to leverage investment in clean energy technologies and energy efficiency programs that may not attract private capital on their own.

But the bank’s report says its expertise was also crucial in assisting two upstate clean energy projects that ultimately were financed through private sources. It cited a 60-MW biomass energy project at the U.S. Army’s Fort Drum, for which the bank was originally committed to purchase $10 million of its debt.

It also said its consultations with private banks helped familiarize them with an ongoing project to install solar arrays at several Finger Lakes region vineyards.