Capital program: Loan or credit enhancement for local home-energy upgrade financing program

We offer two options to capitalize a local financing program for home-energy upgrades: 

• Loan combined with grant 
• Credit enhancement combined with grant 

Loan combined with grant 

Access a competitive-rate loan in combination with a grant to implement a local financing program for home-energy upgrades. Funding is intended to support start-up, operating and capital costs over a four-year implementation period. 

• Loan details: Up to $10 million per local program provided for on-lending within the community for home-energy upgrades on private property and associated costs. Up to 30% of the approved loan amount can be used for approved non-energy improvements (e.g., water conservation, climate adaptation, alternative energy) at the individual participating home
• Grant: Up to 50% of the GMF loan amount to cover program start-up costs (e.g., legal services, procurement of IT tools, website development) and multi-year operating costs (e.g., staffing, marketing and promotions)

This option also includes a loan loss provision to mitigate the default risk of participating homeowner loans. A dedicated loss reserve is established for each program to cover any individual loan losses that might be realized. Amounts committed to the loss reserve are considered an eligible cost and funded by the grant allocation. 

For full details, please read our application guide. 
 

Credit enhancement combined with grant 

A credit enhancement option is available to incentivize private investment into local financing programs for home-energy upgrades. This involves a municipality working in partnership with a third-party lender (e.g., financial institution, impact investor, or utility company) who provides or arranges capital to finance home-energy upgrades.  

Applicants partnering with participating lenders can access this funding to offset the lenders’ risk by providing partial coverage for losses that may arise, while also unlocking preferential financing products for homeowners that would otherwise not be made available in the absence of the credit enhancement (e.g., below-market interest rates, extended repayment terms, or expanded underwriting criteria). 

To be eligible, applicants must demonstrate that they have secured capital commitments from lenders to satisfy a minimum 5:1 leverage ratio (i.e., ratio of loan capital to credit enhancement). For example, a $1 million loss reserve pledged by FCM must mobilize at least $5 million in third-party loan capital.

For full details, please read our application guide.

Prerequisites 

• A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action 
• Evidence of having completed detailed program design work 
   

Notes

Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer. 

How to Apply