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• Our role: Incubating climate solutions• Established by City Council in 1991, TAF has provided
$20 million in grants to the not-for-profit sector and City Agencies to accelerate the reduction of GHGs in Toronto
• Not on the City’s Tax base – TAF’s endowment revenues are used to provide grants and its capital may be used to invest in private entities up to $2 million without Council Approval (equity and debt)
• TAF is flexible, innovative, independent, unique
About TAF
About TowerWise
• Four focus areas including TowerWise – energy efficiency in high-rise homes
• Residential sector responsible for >40% of Toronto’s GHG emissions
• Addressing the financial barriers to higher performance buildings
Origins of the Green Condo Loan ProgramOrigins of the Green Condo Loan Program
Challenge
Opportunity
Market gap
Leverage
Energy efficient high rises cost more to build
Energy efficient buildings cost less to operate
Condo builders pay the extra costs but don’t reap the benefits
Condo Corporation could save >$100,000 per year
Financing challenge
• Financing repayment of capital cost from expected future savings from reduced energy costs “unprecedented”
• Commitment today for a draw-down of funds 3 years or more into the future
• Condo Corporation has no track record of repayment (banker’s dream deal!)
• Market size – 120 buildings per annum max – likely 60 - @$500k per – small market across 6 major institutions (that also want deposit business)
But big potential benefits
Developer, residents and society all benefit in different ways
But group receiving the most direct benefit – residents – takes direct responsibility for costs
Why we need this solution
• Energy performance of a 2-year old condo can be easily improved by 30%. Clearly there is an opportunity for improvements from the very start of construction.
• Condo sector growing rapidly – as many as 50 new buildings a year in Toronto.
How it worksHow it works
$0
$144,000
$0
$500,000
$1,000,000
$1,500,000
Conventional Condo Efficient Condo
Other Gas & Electricity Savings
Leveragable green dividend
How it works
• Incremental cost financing without increasing prices for Green Condos
• Leverage life cycle savings that accrue to the Condo Corporation
• Minimize capital cost barriers for Green Condo construction – Invest in building not in recurring energy costs
• Secure financing on condo building assets and cash flow
Partnering with Tridel
The Lender: Toronto Atmospheric Fund
The Developer: Toronto’s leading condo developer (1.5 million square feet annually)
Stage 1: Proof of concept loan
Stage 2: Syndication of commercial product
The Verve Case Study
The Loan:$475,000 from TAF
The Result:LEED Building with 35-40% energy savings
Plus:900 tonnes of CO2 emissions avoided per year (>2 tonnes per dwelling)
•Good market acceptance
•Affordable energy efficiency
•Success!
Phase 2: Leveraging bank financing
METROGATE LEED-ND COMMUNITY
SOLARIS I & II GREEN FINANCING: >$1M
REPUBLIC CONDOMINIUMS (LEED-Silver Candidates)LEVERAGED GREEN FINANCING: $1,000,000
>2500 tonnes GHG avoided in total
And more . . .
GRAND TRIOMPHE IILEED Candidate35% Energy Savings
LEVERAGED GREEN FINANCING: $500,000
MONARCH CORPORATION - Red33% Energy Savings
The outcome so far
Initial TAF investment with Tridel:• $1.5 million
Current Leverage with Tridel’s lenders and potential boutique financing (20% TAF Guarantee)
• $5 million and growing
New TAF Borrowers:
•Monarch Developments
•Remington
Other cities examining TAF’s model:
•New York
•Chicago
•Seattle
•Melbourne & Sidney, Australia
Stay in touch
www.toronto.ca/tafAnd coming in December:
www.TowerWise.ca
Tim Stoate – 416-393-6368