Banyan Infrastructure Speaks With Renewable Energy Finance Leaders in Wisconsin
The Greenhouse Gas Reduction Fund (GGRF) presents an enormous opportunity to accelerate renewable energy development, deploying $27 billion worth of public capital toward clean energy, efficiency measures, and zero-emission vehicle projects. But while lenders across the country are actively preparing for the program’s rollout, not all parties — or states — are on equal footing.
For some, the journey into green lending is brand new. In Wisconsin, the creation of the state’s first green bank is still ongoing, and few community lenders have experience navigating the complex world of renewable energy project finance. But there is ample opportunity — and public financing — on the way: In April, the Wisconsin Economic Development Corporation received a $62.4-million Solar for All award that will expand solar access to low-income and disadvantaged households throughout the state. While the federal government’s Justice 40 Initiative requires at least 40% of GGRF funding to go to underserved communities, Wisconsin lenders are hoping to see an even bigger piece of that pie invested in areas that have been historically left out of the clean energy conversation.
Like lenders in many other parts of the country, Wisconsin banks, credit unions, community development financial institutions (CDFIs), and other players are eager to learn more about how they can turn this public capital into projects that benefit underserved communities and create meaningful returns so they can serve generations to come. So, earlier this month, Ileana Riverón, Banyan Infrastructure’s senior enterprise account executive and a Wisconsin native, returned home to meet with local financial institutions, trade associations, government agencies, nonprofits, and others and discuss the challenges — and more importantly, the opportunities — that GGRF capital will bring to her home state.
“This conversation is just the beginning,” Ileana said. “There are so many programs that want to help people get trained up on these topics so that they can take advantage of the opportunities that are out there for them, their businesses, and their communities.”
Banyan Infrastructure’s collaboration with local consulting firm Burrell-Harper & Co. LLC is one such resource. The event, organized by Burrell-Harper & Co. LLC, provided audience members with a crash course on green lending, unpacked the logistics of how to leverage funds like the GGRF, and underscored the importance of technology and collaboration in accelerating the deployment of renewable energy capital.
Building a lasting market
While the GGRF is set to inject billions into clean energy development now, its larger aim is to benefit American communities for decades to come. By deploying financial products that de-risk eligible projects and attract additional capital to the market, GGRF dollars are expected to crowd in private investment at a ratio of 7:1. As those financial products are repaid, the public capital that kickstarted this green lending is also recycled, increasing the amount of money available for sustainable infrastructure investment and creating a long-lasting catalyst for market growth.
These ambitious goals are within reach, but they can’t be achieved without systems, standards, and structure. As players in the GGRF ecosystem get ready for this influx of capital, Ileana pointed to three main areas that green lenders and borrowers should prioritize in their own preparations:
Connection between developers, community leaders, technical assistance providers, and the capital stack. With so many moving parts to sustainable infrastructure finance, no one can do it alone. This market needs connective tissue to join community leaders and on-the-ground organizations with project developers, to introduce those developers to project financiers, to provide technical assistance expertise to everyone involved, and to ensure a steady pipeline of projects that maximize the impact of not only this historic GGRF investment but the wider market. All players in the sustainable infrastructure ecosystem can do their part to support this collaboration by not only speaking up and showing up, Michael Harper, managing partner at Burrell-Harper & Co. LLC, noted, but by bringing those who have historically been excluded into the fold.
"We're going to need diverse groups of people at the table from the beginning, not just the usual suspects or selected individuals,” he said. “We've got to cast a very broad net to really deliver impact in low- and moderate-income communities, which are oftentimes last at the table. And so, we have a combination of vendors, developers, trade associations, government agencies, investors, and asset managers that are on the call in order to think through that same lens of equity, and also look at how to create impact."
Shared standards that facilitate speed and liquidity. From origination and underwriting through to tracking and reporting compliance, impact, and other metrics, creating a common language for the sustainable infrastructure market will be critical for accelerating capital deployment. These standards will, in part, be informed by the reporting requirements of the Environmental Protection Agency (EPA), which administers the GGRF program, however Ileana notes that with or without government financing, shared standards are a must for an industry seeking to accelerate clean energy capital deployment. Lenders can help to create these standards by consistently defining requirements and metrics within their own green lending practices and plugging into larger networks to learn from others and align with the wider industry’s best practices.
Technology that allows scalable, efficient reporting, tracking, and coordination. In the digital age, poring over spreadsheets, PDFs, and emails is best left to software. By creating a single source of truth for all project data, the Banyan Infrastructure platform provides clarity and transparency to all parties involved, accelerates the adoption and use of any shared standards through tools like checklists and reports, and saves countless hours of data collection and analysis by efficiently tracking and gathering insights from project performance. This frees up time at all stages of the process to do the human work of connecting and coordinating to build a sustainable infrastructure market that benefits communities across America.
As the conversation wrapped up, Michael acknowledged that their meeting was the beginning of a longer journey to create an efficient and equitable green lending ecosystem — one like the collaboration between Banyan Infrastructure and Burrell-Harper & Co. LLC will help to drive forward.
"I wanted to just initiate this conversation so that we don't end here, that we convene again and as often as necessary, because this is an important time in our society and our country's history, not just in Milwaukee,” Michael said. “We know that the disparity and inequity that happens in our community is often exacerbated by these types of challenges…so we're trying to close that chasm.”
Curious what the GGRF means for the sustainable infrastructure project finance industry? Read “Unleashing the Greenhouse Gas Reduction Fund,” Banyan Infrastructure’s latest white paper discussing this historic government program, its goals, and how technology can help the industry accelerate its capital deployment while achieving the required reporting and tracking to effectively manage public capital.