By Oscar Perry Abello, Next City
But the D.C. Green Bank is determined as part of its mission to bring private lenders into the space. The first permanent loan for Flywheel came from Amalgamated Bank — a union-controlled bank that has some expertise in solar power lending after a 2018 merger with New Resource Bank, which was the first bank to specialize in environmental sustainability lending. D.C. Green Bank also provided a loan guarantee to help facilitate the longer-term loan from Amalgamated.
Earlier this month, the D.C. Green Bank partnered with Virginia Community Capital on another long-term loan for Flywheel, bringing another lender into the community solar space in D.C.
D.C. Green Bank CEO Eli Hopson says they’re already in talks with Amalgamated Bank, Virginia Community Capital and other lenders across the city, including the Black-owned Industrial Bank, to finance additional community solar installations as well as stormwater retention projects — which are also part of D.C. Green Bank’s mandate and connected to D.C.’s burgeoning market for stormwater retention credits. Similar to these first two projects with Flywheel, the green bank would finance construction and the other lenders would refinance with a longer-term loan later, freeing up the green bank to finance construction somewhere else. It’s similar to how the New York Green Bank has done most of its deals.
And each loan helps feed into the next — as more lenders show interest in longer-term loans, more feel comfortable making construction loans knowing they can be refinanced later. Eventually the D.C. Green Bank won’t be needed for these types of loans. It could shift focus to deals that other lenders still see as too risky, or even put itself out of business.
D.C. Green Bank Board Chair Brandi Colander says ultimately the scale of the renewable energy challenge requires much more federal funding, like that in the Build Back Better legislation currently stalled in Congress.
But in the meantime, she says, the D.C. Green Bank and others like it around the country can help prime the pipeline of developers and workers and lenders to be prepared to scale up when or if that funding ever comes — and make sure at least some of those developers are local and focused on the communities who are usually left behind or bulldozed out by large-scale public investments.
“We think the magic of a green bank is you’re leveraging public and private dollars, restructuring financing tools to meet communities and developers where they are,” Colander says. “But you’re shaking up conventional structures to do that.”