New York Governor Andrew Cuomo is starting a $1 billion bank to provide loans to projects that generate power without using fossil fuels, a move meant to push private lenders into the clean-energy market.
The Green Bank, promised by the 55-year-old Democrat in January, will use money collected from utility bills already set aside for energy-efficiency programs as seed money. In a petition filed yesterday, he asked that the New York State Public Service Commission release $165 million.
“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 in a statement e-mailed today. The bank will apply “limited state resources to drive investment into critical areas of the economy.”
Cuomo, considered a potential presidential candidate, must confront a stigma surrounding public investment in clean technology since 2011, when Fremont, California, solar-cell manufacturer Solyndra LLC filed for bankruptcy after receiving a more than $500 million federal loan. The bank will track and evaluate investments, and share the data with private lenders to help build the market, according to the petition.
“By increasing overall market activity, targeting market inefficiencies, and creating greater transparency around risk and comfort among private investors, the Green Bank can reduce the overall cost of capital,” the petition said.
The bank, to be run by the New York State Energy Research and Development Authority, will package loans for resale into the secondary market, creating an opportunity for pension funds and other institutions to invest, the petition said. It will also provide guarantees to private lenders that it will absorb a portion of losses incurred on specific loans.
The bank’s funding will grow as loans are repaid or sold, without additional funds from utility customers, the petition said. In 10 years, Cuomo expects the bank to have $8 billion.
To contact the reporter on this story: Freeman Klopott in Albany, New York, at firstname.lastname@example.org;
To contact the editor responsible for this story: Stephen Merelmanat email@example.com.