The Kresge Foundation in Troy, Michigan, has announced investments totaling nearly $3.3 million in the Clean Energy Group (CEG) and New York City Energy Efficiency Corporation (NYCEEC) to bring clean energy technologies to underserved communities.
The investment includes a $3 million loan guarantee and $290,000 in grants to bring solar PV plus battery storage (solar+storage) technologies to affordable housing and community facilities in low- and moderate-income neighborhoods. Structured as a 50 percent payment guarantee, the loan guarantee will substantially reduce the risk of a payment default to lenders and investors who provide capital for solar+storage projects. The guarantee will be booked as a reserve on the foundation's endowment until a demand for payment is made under a specific guaranteed loan transaction, which will take the form of a program-related investment. NYCEEC will serve as the lender for the loan guarantee initiative, while CEG will manage the initiative.
The investment also includes a $170,000 capacity-building grant to NYCEEC to finance solar+storage projects, build project pipelines, and actively engage in information sharing, and $120,000 in technical-assistance grants to help eligible project owners and developers assess the technical and financial feasibility of new solar+storage projects.
According to the foundation, up-front cost barriers make it difficult for low-wealth communities to access technologies that provide clean, affordable, and resilient power and reduce the impacts of climate-related emergencies — benefits that are critically important to underserved, vulnerable populations.
"This innovative program is a comprehensive finance model that combines a first-of-its-kind loan guarantee with grants that build capacity and assess project feasibility ― a new strategy that will build demand and speed deployment of resilient energy in those communities that need it most," said CEG senior finance director Robert Sanders.
"The Kresge Foundation is persuaded that program-related investments — including below-market loans and loan guarantees — can prove out the viability of delivering clean, resilient power to historically underserved communities," said Lois DeBacker, managing director of the foundation's Environment Program. "That's why we are pleased to announce this pairing of a loan guarantee with traditional grants to speed the adoption of solar+storage technologies in communities with the greatest need."