WWTF Financing Rev It Up Loan Program January 13, 2016
Rev It Up Loan Program Legislative Authorities • MN Statutes 216C.145 & 146 provide Commerce and MMB authority to issue up to $100M in revenue bonds for energy efficiency and renewable energy (EERE) project loans. • Up to $20,000,000 shall be reserved for community EERE projects taking place in small businesses and public buildings. 2
Rev It Up Loan Program • Purpose: – To encourage community investment in energy efficiency and/or renewable energy systems by offering access to low-cost, long-term loans supported using revenue bond issuances. – To stimulate economic development and job creation/retention, improve public infrastructure and private sector properties, while encouraging greenhouse gas emissions reductions. 3
Eligible Borrowers • Direct Issued Loans – Local unit of governments – MHFA • Conduit Issued Loans – Commercial, Industrial, Small Businesses – Private and Non-Profit Healthcare Facilities 4
Eligible Project Types • Anaerobic Digester Gas Systems • Cost-Effective Energy Efficiency Projects • Ground-Source Heat Pump Systems • Micro-Hydro (up to 100 kW) • PV Solar • Small Wind (<250 kW) • Solar Thermal 5
Eligibility Criteria • EERE reliability and cost-effectiveness • Proposed security for loan repayment • Total life-cycle energy and GHG emissions/$ • % of total project cost – funding request • Effective integration with utility conservation programs • Diversity of technology • Geographic distribution 6
Why Apply for a Rev It Up Loan? • To increase operational performance and renew infrastructure at your WWTF. • To mitigate future operational cost increases by reducing energy load and/or increasing energy production. • To ensure your WWTF contributes to your organizational GHG emissions reduction goals. 7
What is Required to Apply? • Completed RFP Application • Comprehensive energy audit or feasibility study to include the following information: – Calculated revenues (energy & operational savings, energy production, or fee-based revenues) – Design details, project teams & implementation timelines – Total project costs • Other forms of credit enhancement (capital contributions, letters of credit, loan guarantees) 8
Deployment Steps for Rev It Up Loan Program Phase se 1 1 Phase se 2 2 Phase se 3 3 Phase se 4 4 Phase se 5 5 Phase se 6 PROCESS Unde derwrit itin ing Issu ssuance Re Repayment Develop lopment Solic icit itat atio ion Evaluat atio ion PLANNING Commerce to annually MMB finalizes bond Author RFP, Guidelines, Commerce to evaluate Bond Counsel Commerce to collect issuance with investors and Application Forms issue an RFP (mid- RFP proposals for determines issuance loan repayments from summer) programmatic and type and structures borrower project eligibility MMB deposits bond official statement for Outreach to peer PROCESS Eligible applicants to issuance funds in program issuance MMB oversees agencies: DEED, PFA, ACTIVITIES AND submit RFP account MMB evaluates management of MPCA, MHFA MILESTONES applications, technical revenue projections MMB negotiates bond bondholder repayment and financial Commerce originates and financial issuance terms using Generate program documents associated assumptions loans to borrower Repayment of loans private placement model prospects (via trade with a proposed enables program to associations and project Commerce releases funds Approved RFP MMB completes project solicit additional RFP referrals: MnSEIA, BGA, to borrower proposals will proceed underwriting analysis proposals LMC, Chambers) to project underwriting and solicits potential Borrower uses funds to investors Identify market interest install EERE systems Identi tify P Poten tenti tial Solicit Pr Projects Proje ject Elig igib ibil ility I Is Fin inaliz ize O Offic icia ial Issu ssue & & Release se Monitor OUTCOMES Near S Shovel-Ready y Determined Proposa sals f s for State temen ment f t for Funds Repaymen ments ts AND GOALS Project Pr cts Elig igib ibil ilit ity Issu ssuance Applicants MMB Borrowers Issuance Type MMB Applicant Local Government Tax-exempt What interest rates are Will investors purchase Benefit from energy cost Is sufficient project • • • • • • Private Businesses reductions or production Taxable required to attract bond issuance details provided • • Non-Profits investors • SECTOR Commerce Applicant Profiles Commerce Commerce CONSIDERATIONS Energy Efficiency Will loans be repaid Loan repayments allow Local Government Are investors identified Do proposals meet • • • • • Various Private Businesses using private per repayment additional loans to be programmatic and • • originated Non-Profits placement issuance schedule project eligibility • Fuel Conversion Are investors repaid on requirements • Anaerobic Digesters MMB Sources of Debt Bond Counsel time • Successful bond Repayment How will official MMB • • Solar Production Energy & statement for issuance Borrowers repayments encourages Do projected • • Publically owned investors to purchase operational savings be structured Will EERE systems revenues exceed • • 3 rd Party Financed perform as predicted future bond issuances Energy production debt financing costs • • Community Solar Revenue generated Borrowers Are sufficient credit • • • Garden Investors from productivity Are terms of bond & enhancements • Solar Thermal gains loan issuance Receive principal and offered as collateral • • interest payments accepted BORROWER Access to low-cost, Project approved BENEFITS Potential borrowers pending positive Finalize bond long-term project Financing approved Market advantage are identified capital underwriting analysis issuance documents
Next Steps • 1 st Quarter, 2016 – Commerce will be revising the Rev It Up Loan Application • 2 nd Quarter, 2016 – Commerce will initiate program outreach & marketing • 3 rd Quarter, 2016 – Commerce will be issuing program RFP • 4 th Quarter, 2016 – Commerce will be evaluating and awarding successful RFP proposals 10
Any Questions? Please contact me to directly to discuss your questions associated with the Rev It Up Loan Program or any other Commerce supported program. Eric Rehm Energy Finance Programs Administrator 651-539-1853 eric.rehm@state.mn.us 11
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