In the light of shrinking public budgets – both at the state and at the federal level – new approaches to leveraging public funding for renewable energies need to be developed. Reed Hundt, CEO of the Coalition for Green Capital, REH Advisors, presented his approach: State Clean Energy Finance Banks.
The proposed new finance entities will leverage public funding with private sector funds and expertise. Thus, these banks reduce the dependency of renewable energy projects on expiring federal grants, tax credits, and subsidies and lower the cost of these projects enough to make them cost-competitive with conventional technologies. State governments can choose between three basic models:
- A quasi-public corporation merging existing state clean energy and energy efficiency funds allowing private investment in the bank and enabling the new entity to make loans and leverage its capital with private capital
- Repurposing portions of one or more existing financing authorities from a grant to a lending model and then through a partnership agreement combine the financing authority’s funds with private funds
- Adjusting an existing or new infrastructure bank so as to attach a clean energy finance bank to fund energy projects to a bank lending to traditional infrastructure projects
Reed Hundt has spent many years in the US on the interface between regulation and finance. He has wide and diverse experience, drawn from years as an advisor to private equity and venture capital firms, consulting at McKinsey & Company, and serving as a senior attorney at the international law firm of Skadden, Arps, Slate, Meagher and Flom. He is currently playing a key role in the creation of Green Banks in the United States – including the nations' first in Connecticut – as CEO of the Coalition for Green Capital. He was an advisor to President Obama on technology and energy during his first election campaign, is a member of the board of Intel, and serves as the Chairman of the Federal Communications Commission ('93 to '97) – the body responsible for creating the regulatory framework for investment in telecommunications in the US.