Community Development Financial Institutions (CDFIs) specializing in financing energy efficiency improvements now have a new partner in providing loans to bring older buildings into the 21st century: Bank of America.
The bank recently announced a new $55 million program designed to provide low-cost loans and grants to CDFIs in local markets that are developing solutions to address barriers that have traditionally kept property owners from financing much-needed upgrades. As part of this program, Bank of America will select up to 12 CDFIs pursuing what it deems the most effective solutions for funding such projects, with an eye towards scaling these “financial products” up to the national level.
Older buildings consume more energy and thus have a larger carbon footprint than their newer counterparts. This means higher costs for electricity, heating and air conditioning, which can add up to big savings for building owners via energy efficient retrofits (making them a good bet for financial institutions, in terms of loans).
“Residential and commercial buildings account for approximately 40 percent of all primary energy consumption in the United States. That’s why, if we really want to address climate change, we have to improve the energy efficiency of existing buildings, particularly older ones that tend to be the least efficient,” said Anne Finucane, Global Strategy and Marketing officer, Bank of America, in a statement.
She goes on to note that, through this program, Bank of America will fund the community lenders working on creative and effective approaches to financing energy efficient retrofits, with the aim of bringing these new financing structures up play on a scale that will have a real impact on the nation’s production of greenhouse gases.