Authority Can Now Offer Benefits of Low-Cost Federal Funding for Clean Energy Projects
TRENTON, N.J. (January 5, 2024) – The New Jersey Economic Development Authority (NJEDA) today announced that it is an eligible State Energy Financing Institution (“SEFI”), a determination by the U.S. Department of Energy’s Loan Programs Office (“LPO”) which will enable the Authority to unlock low-cost capital available through LPO’s Title 17 Clean Energy Financing Program. The LPO provides direct loan financing and loan guarantees for up to 80 percent of eligible project costs for projects aligning with federal energy priorities.
The Bipartisan Infrastructure Law allows for eligible clean energy projects supported by SEFIs, including those using commercially available technologies like wind and solar, to access LPO financing, subject to LPO’s evaluation of the proposed project. This new determination, bolstered with additional loan authority for Title 17 from the Inflation Reduction Act, opens up billions of federal dollars to projects supported by entities like the NJEDA that qualify as SEFIs.
“As a designated SEFI, the NJEDA now has an additional tool for advancing clean energy projects that will contribute toward a cleaner and healthier environment for New Jerseyans,” said NJEDA Chief Executive Officer Tim Sullivan. “It will also help to advance Governor Phil Murphy’s goal of 100 percent clean energy by 2035 – the most ambitious goal of any state in the nation.”
As an eligible SEFI, the NJEDA can support the work of the New Jersey Green Fund (“NJGF”), a planned initiative that will be housed within the NJEDA to invest in clean energy projects in the State. Recently, the NJEDA released a Request for Expressions of Interest (“RFEI”) for parties seeking capital from the NJEDA through the NJGF, which can be accessed here: https://www.njeda.gov/bidding/#RFEI.
“Governor Murphy’s climate action leadership has laid the foundation for a strong and growing green economy,” said Kate Klinger, Executive Director, Governor’s Office of Climate Action and the Green Economy. “NJEDA’s designation as a SEFI will streamline access to federal dollars to invest in green job growth, seed green technology innovation, and expand access to clean energy produced right here in New Jersey.”
“Access to LPO capital is yet another way the NJEDA can help developers, property owners, community-based organizations, and other stakeholders move their clean energy projects forward,” said NJEDA Chief Economic Transformation Officer Kathleen Coviello. “Paired with the NJEDA’s planned NJGF, we are poised to support small- and large-scale projects that will add to our clean energy momentum.”
A SEFI is an entity established by a state, Indian Tribal entity, or Alaska Native Corporation to provide financing support or credit enhancements for eligible clean energy projects and to take steps to reduce financial barriers to the deployment of eligible clean energy projects.
Examples of qualifying project participation by a SEFI may include, but are not limited to:
- Providing equity/subordinate portion of capital stack
- Providing loan loss reserve with respect to a junior portion of capital stack
- Co-lending with LPO
- Providing financial backstop for specific key project elements that may be subject to regulatory or local market risk.
Additional SEFI program details and application requirements are described in the Title 17 Clean Energy Financing Program Guide and on the Title 17 Overview web page.
Article Courtesy of the NJEDA