C-PACE Financing
C-PACE – Commercial Property Assessed Clean Energy – is an innovative clean energy financing tool that provides 100% upfront capital to property owners who want to upgrade their buildings with energy efficiency, renewable energy, and water management systems.
The Basics
- 100% upfront financing for eligible projects and properties
- Wide range of eligible improvements
- Fixed-rate, fully amortizing loans for up to 30+ years
- No personal or corporate guarantees
- C-PACE financing available within two years after completion
- C-PACE loan secured by a voluntary special assessment lien
- Nonaccelerating: stays with property upon sale or refinance
- Capital Providers structure financing directly with borrowers
- Prepayable per financing agreement with Capital Provider
- Enforced by locality or Capital Provider
- Consent of all secured mortgage holders required
The Benefits
- 100% project financing of retrofit and up to 30+% of new construction
- Long financing terms = lower annual payments
- Flexible prepayment for project construction and stabilization
- Non-recourse vs. typical bank loan recourse
- Potential accounting benefits
- Better performing building = lower operating and capital costs
- C-PACE payments transfer to new owner
- Helps meet ESG/sustainability goals
- Fund up to 30% of hard and soft construction costs
- Gap financing that replaces equity or more expensive “mezz” debt
- Lowers overall cost of capital on development projects, improves ROI
- Defer payments for multiple years
- Interest only financing available
- Funding soft costs in loan can improve construction cash flow
