Existing state managed finance programs and funds are too With Government-Backed Funds, Use Agile Practices limited to accelerate growth in business and more directly to Grow Green Business the green economy. Government-backed capital programs To accelerate the growth of green economy, the current and funds need to be: (1) organized to better address gaps; government-funded or backed programs need more agility. (2) aligned for better leverage; (3) more agile and (4) in- For example the Renewable Energy Fund (REF) only funds creased. Creating a separate dedicated government-backed electricity production projects but could be expanded to green capital fund would be counter-productive at this time allow investments, loans and grants across the spectrum of because there is not enough money to “fully fund” both a renewable energy production. Rhode Island should invest regular fund and a green fund. in companies that can create permanent green jobs as well Projects within the Meta Project as temporary construction jobs associated with renewable The capital meta project will begin by focusing primarily energy projects. Agility practices can also target the funds on government-backed programs and funds. It will aim to companies with jobs coded green by the North Ameri- to achieve five objectives. One, provide broadly based can Industry Classification System (NAICS). In exchange for coherent and aligned funds and programs along the capital the agility, recipients of the funds would be accountable spectrum. Two, increase the amount of government-backed for meeting measured growth requirements, e.g., number funds. Three, develop agile practices to direct capital on of jobs added or increases in wages. Green Innovation Fund Study the Feasibility of a Self-Sustaining $1 mil. $1 mil. Tax Credit in 2010 $8.5 mil. 2 Estimated $7 mil. TBD $5 mil. $2.5 mil. Loan Grant / $18 mil. $13 mil. Loan $80 mil. $20 mil. Guarantee Loan Level Proposed Level Current Funding Type of - - - v 1.0electricity. Thus, projects that use solar thermal, geothermaland other non-electric technologies cannot receive REFfunds. This project should review the mill rate and reviewable projects, spurring action and driving the market.investment with private investment to build the new fundthe companies the fund helps create. As created companiesbuy out the fund’s position, that money - and matching the continuum to green ideas and businesses for the four Review the Renewable Energy Fund for Scope and Use green accelerators: advance manufacturing, energy effi Ratepayers fund the REF through a small percentage ciency, innovation and wind. Four, determine the feasibil surcharge on their electricity use. This rate, 0.3 mills per ity of establishing self-sustaining capital funds comprised kWh, is substantially lower than competitive states like of both state and federal funding aimed at investments in Massachusetts and Connectictut (0.5 and 1.0, respectively). growth companies in the green economy providing ser Because funds are generated only from electricity, the REF vices or making products. only supports renewable energy projects that produce Create a Menu of Government-Backed Funds/Increase Fund Limits Pieces of this menu already exist and will be organized. similar charges for natural gas consumption currently used The chart below lists the type of fund and the current and for “demand-side management” programs. A larger, more proposed funding limits. broadly defined REF could support a wider range of renew- Fund Industrial Recreation The Slater Technology Fund has driven important inno- Bond Authority vations in the state. But it no longer matches the scale Small Business Loan of similar funds. The state should pursue an innovative, Fund Corp. multi-lateral funding approach that matches government Renewable Energy to a scale that can support more robust spending in green- Fund based research, development and innovation - the actual Regional selling in the market of a green based product. While the Greenhouse state will need to invest the initial capital, this fund would Gas Initiative become self-sustaining by taking ownership positions in Innovation Tax Credit money from the state - would sustain and grow the fund to National Grid Fund Varied $46 mil. $46 mil. support increased commercialization and innovation. Slater Technology Equity $2 mil. $3 mil. Articulate the Full Continuum of Green Capital Fund This project focuses on developing coherence for all public and private sources of capital to ensure that they “target” As part of assembling the menu and increasing the fund green companies and green products. To be on the contin- limits, each fund would maintain its own control. But it uum, the fund can be fully green-targeted or feature agile would be advantageous for all such funds to co-locate so practices that “favor” green like the government-backed collaboration on deals would occur. funds. It will serve companies from start-up through growing and then expanding as a company. Advancing the Green Economy in Rhode Island 6
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