CIB to invest $50M in Efficiency Capital’s retrofit program
The Canada Infrastructure Bank (CIB) has announced its intent to invest up to $50 million into a private-sector asset-management platform that will help to develop, fund and deliver energy-efficiency and low-carbon retrofits.
CIB is committing the money to Efficiency Capital (EC) as part of its Commercial Building Retrofit Initiative (CBRI), which targets the reduction of building-related greenhouse gas (GHG) emissions in pursuit of Canada’s net-zero ambitions.
Under the terms of the arrangement, EC will become a retrofit aggregator within the CBRI program. CIB financing will cover up to 80 percent of the capital costs on eligible projects, while EC’s impact investors will contribute the remaining capital as equity through EC’s $62.5-million platform.
“CIB is pleased to announce its investment commitment to Efficiency Capital, an organization we recognize for its innovative financing approach which enables building owners to execute on major energy efficiency retrofit projects without the need for any upfront, working capital deployment,” said CEO Ehren Cory. “Building retrofits create near-term job opportunities for Canadians, and the long-term impact of these projects leads to the development of more resilient, energy efficient infrastructure across Canada, ultimately reducing our GHG emissions and carbon footprint.”
Working with pre-approved engineering partners and technology providers, EC will offer an array of fully-funded technical solutions – including LED lights, heat pumps, HVAC retrofits, as well as onsite solar PV and energy storage – as long as proposed projects achieve a minimum 30 percent GHG reductions.
“Canadian businesses and building owners are starting to make serious commitments to reduce their GHG emissions but often struggle with the allocation of sufficient capital to implement their projects at scale or across multiple sites,” said Efficiency Capital CEO Chandra Ramadurai. “EC brings specialized capital and diverse expert teams to deliver projects that otherwise would fail to meet the internal hurdle rates of our clients.”
Efficiency Capital was originally incubated and launched over five years ago by The Atmospheric Fund (TAF). It is a performance-based investment solutions provider that upgrades the energy and environmental performance of buildings with no upfront cost to the owner.
TAF and EC have invested in more than 55 retrofit installations to date that will generate savings of 50 million kWh of electricity, 20 million cubic metres of natural gas, 2 billion litres of water, and reductions of 25 Kt of greenhouse gas emissions over their lifetime.
The CIB says building retrofit projects will contribute greatly to Canada’s transition to a low-carbon future. With 17 percent of GHG emissions generated by commercial, residential and institutional buildings, the arrangement with Efficiency Capital demonstrates how private sector developers and funders can lead the charge towards a net-zero economy.
The CIB and EC are expected to reach financial close on the agreement in the fall. The deal is subject to approval by the CIB board of directors.