On Saturday, Governor John Hickenlooper announced the creation of a Colorado green bank. The green bank will be an independent, nonprofit entity called the “Colorado Clean Energy Fund” (CCEF). The objective of CCEF will be to drive private investment into clean energy projects and support the deployment of clean energy technologies in the state. To achieve this goal, CCEF will offer a variety of financial tools and services.
Green banks are powerful tools that leverage limited public or nonprofit funding to drive private investment in clean energy markets. For example, the Connecticut Green Bank has used $190 million to bring over $1.3 billion of total investment to the state’s clean energy economy. Across the country, green banks have catalyzed nearly $3 billion in clean energy investment.
The creation of a Colorado green bank can build on the enormous growth of clean energy in Colorado. Colorado already has nearly 58,000 clean energy jobs across the state. With over 300 days of sunshine a year and one of the first renewable energy portfolio standards in the country, the Colorado clean energy market is developing at a breakneck pace. The price of renewables is becoming so cheap in Colorado, Xcel, one of Colorado’s major utilities, in on track to procure 55% of its portfolio from renewables by 2023. A green bank will be a powerful tool to build upon this growth and drive further investment in clean energy.
The Governor’s announcement is the culmination of a multi-year partnership between CGC and Colorado. Most recently, CGC has been working with the Colorado Energy Office (CEO) on a grant from the US Department of Energy to explore green bank creation options. During our work in Colorado, CGC has met with dozens of developers, nonprofits, advocates, and policy makers to discuss the green bank opportunity, and seen the enthusiasm for the concept first hand. Energy efficiency, distributed and community solar, and PACE are some of the focus areas for green bank activity that have surfaced through these conversations.
Now that CCEF has been created, next steps include finalizing the board and identifying potential projects for a first round of financing. CGC looks forward to our continuing engagement with Colorado and assisting in-state partners to launch the new institution.
CCEF Capitalizes on Benefits of Nonprofit Green Bank Structure
The Colorado Clean Energy Fund joins a growing number of nonprofit green banks, including the recently formed Nevada Clean Energy Fund. The growth of the nonprofit model is enabled by the emergence of alternative sources of capital and practitioner networks for green banks. As philanthropies and foundations increasingly express interest in supporting clean energy finance through grants and program related investments, nonprofit green banks are ideally positioned to deploy capital on their behalf.
As CCEF works to tap into these new networks, it will have access to the newly formed American Green Bank Consortium. The Consortium is a CGC initiative which will act as a hub to facilitate shared expertise, best practices, and capitalization strategies among green banks and green bank supporters. The consortium will also offer ad hoc consulting services and technical assistance to existing green banks and parties interested in creating green banks. CCEF will be able to tap into this robust network to learn directly from successful green banks across the country while meeting potential partners for future projects and capital raising.