New York State’s Governor Cuomo has launched a U$1 billion Green Bank initiative to mobilize private sector financing for clean energy projects, which will help generate jobs and boost the state’s economy.
The first step of the initiative was launched yesterday, with a petition to use around US$165 million of uncommitted funds for the Green Bank. Once this initial funding is approved, the project will help grow New York State’s clean energy economy through job creation and private sector investment.
Governor Cuomo first described the Green Bank in his State of the State address in January as a way to attract investment for a cleaner, more resilient state. The long-term aim of the Bank is to create a stand-alone private sector financing market that does not need government support.
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In a statement, Governor Cuomo said: “Through the New York Green Bank, 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.
“New York State has a track record of being at the forefront of environmental and energy policy innovations. As a public-private partnership, the Green Bank will implement a pioneering approach that strategically and efficiently uses limited state resources to drive investment into critical areas of the economy. With this initiative, we will promote job growth and business development, improve resiliency and air quality, and lower costs for consumers while providing them with greater choices and value for their money.”
Preliminary models estimate that over five years, the Green Bank will more than double the amount of private capital available to grow clean energy markets, and deliver ten times more private capital over 20 years.
Richard Kauffman, Chairman of Energy and Finance for New York State, also commented: “By incorporating a financing model into the State’s clean energy support toolkit, the State will derive greater private sector leverage from scarce public funding than the current incentive model alone. The Green Bank is the next step in our strategy to unleash markets to provide economic growth and to help transform New York’s energy system into one that iscleaner, more efficient and offers more value to customers.”
The Green Bank will work with private sector lenders to offer financial products that support economically-viable clean energy projects which cannot currently access financing, due to market barriers such as federal policy uncertainty and lack of publicly-traded capital markets for clean energy.
Michael Eckhart, Global Head of Environmental Finance at Citigroup, said in the government statement: “The private sector welcomes the Governor’s Green Bank initiative. The task of scaling up clean energy and energy efficiency in New York and across the nation will require access to significant amounts of capital. Governor Cuomo and Richard Kauffman are uniquely qualified to facilitate partnership between the private and public sectors, which is critical to achieving success. We look forward to working with the Green Bank to bring clean energy and green jobs to New Yorkers.”
Commenting on Governor Cuomo’s initial Green Bank announcement in January, Amy Davidsen, US Director, The Climate Group had said: “We welcome the Governor’s call for New York to be a leading example to the rest of the US, showing how clean energy investment offers economic as well as environmental opportunities. Such leadership should be replicated across the nation.”
The Bank is expected to open for business early next year.